China has announced a 90-day suspension of tariff hikes on $126bn of US cars, trucks and motor parts following its ceasefire in a trade battle with Washington.
The tax agency said the suspension, which takes effect on January 1, is intended to carry out the agreement reached by presidents Donald Trump and Xi Jinping during a December 1 meeting in Argentina.
The agency said Beijing will suspend a 25% import charge on $66bn of cars and trucks and a 5% charge on $60bn of motor parts. Mr Trump agreed earlier to suspend planned US tariff hikes due to take effect on January 1 on Chinese imports while the two sides negotiate.
China has indicated it plans to move ahead with the talks despite strains over the arrest of a Chinese technology executive in Canada to face possible US charges related to a violation of trade sanctions on Iran.
The Chinese penalties were imposed in response to Mr Trump’s decision to slap 25% tariffs on $50bn of Chinese goods and a 10% charge on another $200bn. The US and other trading partners complain that Beijing steals or pressures companies to hand over technology in violation of its market-opening obligations.
American officials also worry that Chinese industry plans that call for state-led creation of global champions in robotics and other fields threaten US industrial leadership.
A spokesman for China’s Commerce Ministry, Gao Feng, said the two sides were in “close contact” but gave no timetable for possible face-to-face negotiations.
Economists say 90 days is probably too little time to resolve conflicts that have bedevilled US-Chinese relations for years. They say Beijing’s goal will probably be to show it is making progress so Mr Trump extends his deadline.
Beijing officials expressed confidence China could withstand US pressure but the fight battered consumer confidence and threatened export industries that support millions of jobs. The tariff cut lowers the charge for US-made cars and trucks to 15%, the same as imports from other countries.