DEVELOPING: US-China trade uncertainty fuels market plunge

DEVELOPING: US-China trade uncertainty fuels market plunge

DEVELOPING: US-China trade uncertainty fuels market plunge

Trump said China had committed to buying large amounts of United States agricultural products and completely removing all tariffs on United States automobiles, a huge shift from its current 40 per cent penalty, although China hasn't confirmed this.

White House economic adviser Larry Kudlow says there is no "specific agreement" between the United States and China that would address China's tariffs on US auto imports but says he "expects" those duties to go to zero.

According to the White House, the USA will still keep in place $200 billion of tariffs on Chinese imports but will not increase those tariffs from 10 percent to 25 percent after the start of the year as originally planned.

Over the weekend, Trump had boasted that he had reached a deal with China's President Xi Jinping, although details remained unclear into late Tuesday.

Both sides will immediately hold talks on structural changes concerning forced technology transfers made by Chinese firms on US companies, intellectual property rights protection, non-tariff trade barriers, cyber intrusion concerns, cyber theft and agricultural, the White House added.

Treasury Secretary Steven Mnuchin, on Fox Business Network on Tuesday, put China's trade commitments at US$1.2 trillion (S$1.64 trillion), but said they need to be put "on paper".

Moreover, none of the commitments that US officials said had been given by China, including reducing its 40 percent tariffs on autos, were agreed to in writing and specifics had yet to be hammered out.

The US trade deficit with China was United States dollars 335 billion a year ago and many manufacturers rely on inputs from the world's number two economy, so eliminating the deficit would be an extraordinary goal. "China trade truce because China has agreed to start buying agricultural products from American farmers immediately", said Monica Tu, an analyst at researcher Shanghai JC Intelligence Co. In September, Washington went still further and announced 10 percent import duties on $200 billion worth of Chinese goods.

But Mnuchin said, "I think there's no question the president's tariff strategy has worked".

Trump said China had committed to buying large amounts of US agricultural products and completely removing all tariffs on US automobiles a huge shift from its current 40 per cent penalty although China hasn't confirmed this

But the deal was also vague, and the uncertainty has led to skepticism that the divides between the U.S. and Chinese goals can be bridged.

Trump's economic team has spun his knee-jerk protectionism as a tactic created to negotiate "better" trade deals - but so far, those better trade deals don't seem to be stronger than the status quo ante.

The two countries issued wildly different statements, and Trump administration officials have offered changing accounts of the deal's details in the days since the meeting.

Despite Mnuchin's earlier comments on President Trump leading trade negotiations with China, .

"However I will give it to him that he has managed to bring China to the table", said Guajardo, who is now a senior director at Washington-based McLarty Associates focusing on global trade.

Another significant take-away from the preliminary agreement could be its impact on energy markets, both US oil import to China and perhaps even more importantly from a development perspective liquefied natural gas (LNG) imports.

The U.S. had a $335.4 billion trade deficit with China in 2017.

Confusion has also arisen over when the agreed 90 day period for negotiations will kick in, with some saying it begins now, others claiming it's January.


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