Auto Industry Sees New Hope in China-US Treaty

Auto Industry Sees New Hope in China-US Treaty

And Beijing agreed to reconsider a takeover by USA chipmaker Qualcomm that it had previously blocked. It may actually matter more to foreign automakers with factories in the US than for Ford and General Motors (GM). While there are other factors that have influenced this decline, a major contributor has been the ongoing trade war between China and the US. The now imposing a 10 percent duty on imported aluminum and a 25 percent duty on imported steel.

China-based music streaming company Tencent Music Entertainment was last up 7.9 per cent in its USA debut.

China has already slapped tariffs on $110 billion in US goods. The program that Chinese officials call "Made in China 2025" has been one of the main targets in Trump's trade war. But he has also vowed to go ahead with that increase on March 1 - and to impose new levies on other imports from China - if no progress is made in talks with Beijing. On Thursday, the U.S. Department of Agriculture disclosed sales of 1.13 million tons to China. Following a summit on trade in Buenos Aires earlier this month, Mr Trump jolted global auto stocks with a tweet that China agreed to "reduce and remove" tariffs on imported American-made cars, something China did not confirm at the time.

Tuesday's reports in U.S. media, which were based on anonymous sources including a vehicle industry executive, said China outlined the plan on a recent telephone call between top trade negotiators from the two countries.

The leaders met on the sidelines of the Group of 20 summit in Buenos Aires on December 1 and agreed to a 90-day truce while they tried to find a solution to the escalating trade dispute, but they provided differing accounts of the scope of their agreement.

This month in Argentina, President Trump and Chinese President Xi Jinping agreed to a truce that delayed the planned January 1 US increase of tariffs to 25 percent from 10 percent on $200 billion worth of Chinese goods. "However this approach is making China think twice about their hard stance", said Ernesto Ramos, Managing Director of Active equities for BMO Global Asset Management in Chicago.

US officials insist that the American economy is more resilient to the tumult than China's, but they remain anxious of the economic effects of a prolonged showdown - as Trump has made economic growth the benchmark by which he wants his administration judged.

Sentiment had got a lift on Tuesday from reports China was considering cutting import tariffs on American-made cars to 15 percent from the current 40 percent.

The US has a long list of complaints against China on intellectual property, forced technology transfers and industrial subsidies. Both Chinese and American trade officials say that there is indeed dialog between the two nations to reach a compromise.

BMW, which exports sport utility vehicles from the United States to China, rose as much as 3.3pc to €72.40 in Frankfurt.

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