China cuts extra tariffs

China pressed on with its trade war truce with the United States yesterday, announcing it will suspend extra tariffs added to US-made cars and auto parts for three months from January 1. The move is another sign that the ceasefire has not been derailed by the recent arrest in Canada of a top Chinese telecom executive at the behest of the United States. Beijing raised tariffs on American-made cars and auto parts this summer by 25 percent in retaliation for US tariffs on $50 billion of Chinese goods.

Halting the punitive duties brings the tariffs back down from 40 percent to the 15 percent imposed on all foreign vehicles. “Suspension of the tariffs is a concrete measure to implement the consensus reached by the two heads of state,” said the announcement by the State Council’s Tariff Commission Office, noting it applied to 211 product codes. US President Donald Trump and Chinese leader Xi Jinping agreed on the sidelines of the G20 summit in Buenos Aires on December 1 to a 90-day truce while they tried to find a solution to the escalating trade dispute.

Confusion and unease over what agreement the two sides reached in Argentina has roiled stock markets. But top trade negotiators talked on the phone this week to discuss a timetable for the trade talks and Friday’s announcement confirms a Trump tweet from December 2 that China would act on the auto tariffs. “We hope that both sides will, in accordance with the consensus reached by the two heads of state, on the premise of mutual respect, mutual equality, faithfulness, words and actions, and intensify consultations in the direction of cancelling all of the extra tariff increases,” the State Council’s statement said.