By now everyone is aware of the ongoing trade war between the US and China. President Trump made the first strike months ago when he imposed tariffs on imported Chinese goods. China responded in kind, and its response hurt. It tacked on tariffs for US-made cars imported to China and American automakers were not happy, to say the least. However, it appears a deal of some sort has been made.
Trump wrote on Twitter that “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”
Little else has since been said by the president. China hasn’t said a thing. But already shares of German automakers like BMW and Daimler have rallied following Trump’s comment. Tesla will also be very happy about this deal because it desperately needs China’s business. Although it is about to begin construction of a new plant in China, Tesla will still need to import vehicles for the foreseeable future. Just last week, China said that tariffs on US-built cars would be 15 percent if not for the ongoing trade dispute. Instead, it called for negotiations with the goal of ending the trade war.
Trump and Chinese president Xi Jinping recently met face to face at the G20 summit in Argentina and it appears that meeting was fruitful. If there’s no deal in place, then there’ll be a 15 percent to 25 percent increase of some $200 billion worth of Chinese-made products at the beginning of next year. That’s less than one month from now. Fortunately, it sure sounds like something positive is happening.
Trump also tweeted the following: “My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!” We’ll update this space if and when an official announcement is made.
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