Relief from the USA and China’s trade agreement - Danske Bank


Widely read Chinese tabloid the Global Times, published by the ruling Communist Party's official People's Daily, warned people had to have realistic expectations. The Chinese Foreign Ministry says Trump and President Xi "reached consensus not to impose new additional tariffs and agreed to instruct the economic teams of the two sides to step up negotiations toward the removal of all additional tariffs"-closer to Trump's claim, but nowhere near as certain". Chinese President Xi Jinping promised in exchange to buy more American exports. In Asia, the Shanghai Composite gained more than 2.5% and the Nikkei 225 was up 1%.

"Markets should not be too happy too early", he said.

"It prevents the economic and trade frictions from expanding and opens new prospects for cooperation", Geng said. Increases in tariffs have large negative effects while resolution does not undo the harm completely, as economies have difficulty bouncing back from the structural changes induced by the tariffs.

Those comments came a day after special counsel Robert S. Mueller III revealed a new plea deal with Michael Cohen, Trump's former lawyer and "fixer".

US exports of cars and light trucks to China were worth $9.5 billion in 2017 and have dropped off significantly since China imposed its retaliatory tariffs over the summer that gave exporters in Europe and Japan a significant advantage. The EU and Japan have joined with some WTO complaints in recent months.

The American complaints strike at the crux of a development strategy Chinese leaders see as a route to prosperity and global influence. The fact that China made no mention of agriculture in its statement after the meeting may also increase trader concerns over whether these purchases will materialize.

It is linked to "intense geopolitical competition" with Washington. Trump had planned to raise the tariffs on the $200 billion to 25 percent if he couldn't get a deal with Xi. The agreement "is not a ceasefire, it's just a de-escalation", he said.

Cui put the odds of an agreement at "higher than 50 per cent" but said he had no idea how long that might take.

"We'll be discussing trade".

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China has agreed to "reduce and remove" tariffs below the 40% level that Beijing is now charging on USA cars, Donald Trump has claimed, amid a trade war truce agreed by the two countries. But they have been overshadowed by the tariff battle.

Earlier this year, China's tariff's on US imported automobiles stood at 15 percent from 25 percent, Politico reported.

"China isn't giving away that much as German automakers like BMW and Daimler benefit the most", said Janet Lewis, an analyst at Macquarie Capital Securities in Tokyo.

During the working dinner the Chinese leader said co-operation was the best choice for their nations, state news agency Xinhua reports.

Trump tweeted that China had agreed to "reduce and remove" tariffs of 40 percent on cars, though Beijing has yet to confirm the move.

Foreign carmakers have long pleaded for freer access to China's auto market, while its own manufacturers are trying to expand overseas. Beijing is unhappy with United States limits on exports of "dual use" technology with possible military applications.

Qualcomm announced it was dropping plans to proceed with the deal after it failed to receive Chinese government approval.

Xi has also agreed to designate Fentanyl as a "Controlled Substance", meaning that those selling Fentanyl to the USA will be subject to China's maximum penalty under the law, the statement said, calling it a "wonderful humanitarian gesture".

Without that, hardliners in Washington "will urge Trump to resume escalation", they said.