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Trump says China to cut tariffs on US cars; markets rise

IANS  |  Washington 

has agreed to cut tariffs on cars it imports from the US, has said, after he negotiated a truce in the trade war with The announcement boosted the financial markets.

"has agreed to reduce and remove tariffs on cars coming into from the US. Currently the tariff is 40 per cent," Trump tweeted on Sunday.

The outcome of the Trump-Xi meeting boosted financial markets in on Monday. The benchmark Shanghai Composite index led the way with a rise of 2.57 per cent while Hong Kong was up 2.45 per cent and closed 1 per cent better off. Australia's benchmark ASX200 index finished the day up 1.84 per cent.

The increases paved the way for sharp rises on European and US exchanges later in the day with futures trade seeing the FTSE100 opening up by 1.6 per cent and the Dow Jones industrial average on Wall Street expected to leap 2 per cent.

But Trump didn't give details about the or when the change would happen and what the new tariff level would be, reported. There was no immediate response from the on cutting

Trump's announcement came shortly after he and his Chinese counterpart announced a breakthrough during the summit in on Saturday, temporarily pausing the trade row between the world's two largest economies that saw tit-for-tat tariffs imposed on each other's products.

Neither country had mentioned the car tariff issue in their official read-outs of the Trump-Xi weekend meeting in which agreed to hold off on his threat to impose 25 per cent tariffs on $200 billion worth of Chinese goods from January 1, leaving them at the current 10 per cent rate.

In return, agreed to purchase more from US farmers immediately.

Earlier this year, China lowered its tariffs on from 25 per cent to 15 per cent. However, it later imposed new additional tariffs of 25 per cent on American-made passenger vehicles after Trump raised the tariff on Chinese autos from 2.5 to 27.5 per cent.

The US leader called his deal with Xi "incredible". "It goes down, certainly - if it happens, it goes down as one of the largest deals ever made," he told reporters.

Meanwhile, the Chinese warned that while the new "consensus" was a welcome development and gave both sides "breathing space" to resolve their differences, there was no "magic wand" that would allow the grievances to disappear immediately.

"Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath," said the in an editorial.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 15:34 IST