White House seeks more German auto production in US

White House chief economic adviser Larry Kudlow

White House chief economic adviser Larry Kudlow

China and the US announced a truce in their trade war after the meeting between Trump and Xi Jinping on Saturday, but that quickly descended into confusion, with both sides announcing different statements on what was agreed.

The 90-day timetable started Saturday and will stave off a round of tariffs on Beijing that were scheduled to go into effect on January 1, the White House said on Monday.

In exchange, the US wants an immediate start to talks on Trump's biggest complaints about Chinese trade practices: intellectual property theft, non-tariff barriers and forced technology transfer.

China offered more than $1.2 trillion in additional commitments on trade at the dinner between Xi and Trump on Saturday, Treasury Secretary Steve Mnuchin said on Monday.

"We hope that this will serve as a starting point for additional negotiations, and an agreement in the future that will allow USA companies to remain competitive in a global marketplace while protecting intellectual property rights", MEMA said. "Relations with China have taken a BIG leap forward!" For months, the two countries have engaged in tit-for-tat increases in tariffs on hundreds of billions of dollars of exports flowing between the two countries.

Americans would get a majority ownership in Chinese companies for the first time, Kudlow said on CNBC. "It will always be the best way to max out our economic power", he said on Tuesday.

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

It explained that China and the US had agreed to work together on issues including widening market access, protecting intellectual property rights, avoiding forced technology transfers and jointly fighting against cyber theft. The statement did not mention Trump or Xi, however the state news agency Xinhua later said the ministry statement was hailing their meeting. He told reporters that China had said it was willing to "expand imports according to the needs of its domestic market and people, including importing marketable products from the U.S.to gradually ease the trade imbalances", adding that both sides had agreed to open their markets to each other.

"There was a significant commitment from both leaders on what needs to be done over the 90 days and instructions to both teams to negotiate and turn this into a real agreement with specific action items, deliverables and time frames", Mnuchin said.

"The history here with China promises is not very good".

Still, Beijing gave no sign of a changed stance on technology ambitions that Washington says violate Chinese market-opening obligations and might threaten US industrial leadership.

But he urged caution going into the new year and pointed out that holding back on higher tariffs isn't the same as lifting the ones already in place. Asked whether the administration would walk away if issues with China are not resolved within 90 days, Navarro suggested Trump would "simply raise" existing tariffs on $200 billion worth of Chinese goods. China has placed a 10 percent tariff on U.S. -LNG imports with the threat of increasing that figure in the future, resulting in China having to find alternate sources of the super-cooled fuel on the spot market.

"Small rays of light" such as Saturday's agreement between the two leaders "create tactical opportunities for investors", said Kerry Craig, global market strategist at JPMorgan Asset Management.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.