President Trump teased automakers in the USA and worldwide late Sunday with a characteristically minimalist announcement of China's apparent intention to ease its 40 percent import tariffs on US -made cars.
But the language used in the Trump administration's announcement of the deal was very different to that in Chinese government statements, especially on Beijing's promises to buy more U.S. goods and the possibility of removing existing tariffs. The U.S. spent 716 Billion Dollars this year.
China has agreed to "reduce and remove" tariffs below the 40 percent level that Beijing is now charging on U.S. -made vehicles, U.S. President Donald Trump said, as a trade war truce between the two countries gathers pace, cheering markets.
USA officials will monitor Chinese progress on enforcing the commitments very closely, Kudlow said.
Treasury Secretary Steven Mnuchin told reporters at the White House Monday that there was an "an immediate focus on reducing auto tariffs", though he did not provide details or timing. But it later added a 25 percent tariff on US-made cars as trade tensions soared, bringing them to 40 percent. The US has a 27.5 per cent tax on imported cars from China. "People have already started to reconsider their sourcing arrangements", said Larry Sloven, who has been sourcing and manufacturing in China for three decades.
The two presidents also agreed to begin negotiations on changes to forced technology transfer, intellectual property protection, and non-tariff barriers.
Specifically, China highlighted that the two leaders plan to visit each other's countries at some point and that both sides would work toward scrapping all tariffs to reach a mutually beneficial, win-win agreement.
US stock indexes also opened sharply higher in NY at the start of a new work week, with the widely watched Dow Jones Industrial Average of 30 key stocks ahead more than 1.5 percent.
But observers warned there were still major issues that needed to be resolved, including access for United States companies and intellectual property protection.
The truce, although temporary, is a positive step towards a resolution to the US-China trade war.
If no broader deal is reached within 90 days, the U.S. said it would hike tariffs on $200bn of Chinese goods from 10 to 25 percent.
The president met with Chinese President Xi Jinping for dinner on Saturday during the G-20 summit in Argentina and agreed to suspend the proposed tariffs in exchange for China's agreement to purchase unspecified amounts of agricultural products from the United States.
The White House threatened that if, after 90 days, no progress had been made, it would go ahead with those 25 percent tariff increase on $200 billion in goods.
Many US automakers build their cars in China, but for some the tariff hikes have hit sales.
But in an editorial, the official China Daily 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.