Trump says China has agreed to cut tariffs on U.S.-made autos

Cars are seen in a parking lot in Palm Springs, California April 13, 2015. Picture taken April 13, 2015. REUTERS/Lucy Nicholson

WASHINGTON (Reuters) – U.S. President Donald Trump said on Sunday that China had agreed to “reduce and remove” tariffs on U.S. cars below the 40 percent level that Beijing is currently charging on American-made vehicles.

A day after he and Chinese President Xi Jinping called a 90-day cease-fire in their trade war to allow time for negotiations, Trump said on Twitter: “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”

Trump’s tweet did not specify a new level for the Chinese tariffs. The White House and U.S. Trade Representative’s (USTR) office did not immediately respond to a request for comment late Sunday.

After a 2-1/2 hour dinner with Xi on Saturday in Buenos Aires, Trump agreed to postpone an increase in the tariff rate on $200 billion worth of Chinese imports to 25 percent from 10 percent scheduled for Jan. 1, while China agreed to resume purchases of some U.S. farm and energy commodities.

The two sides also agreed to negotiate over the next 90 days over “structural changes” to China’s policies on technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.

Major U.S. automakers said they were unaware of the lower tariffs on exports to China. The automakers have a previously scheduled meeting with USTR on Monday, two people briefed on the matter told Reuters.

The lower tariffs would be a boost to automakers exporting vehicles to China, including Ford Motor Co (F.N), and BMW (BMWG.DE) which exports U.S.-built luxury vehicles to China.

While China had lowered its general tariff rate for imported cars to 15 percent from 25 percent this year, it had slapped on a 25 percent punitive tariff on American-made vehicles, bringing the rate back up to 40 percent. The United States currently is charging tariffs of 27.5 percent on Chinese vehicles.

On Wednesday, U.S. Trade Representative Robert Lighthizer said Trump had directed him to examine all available tools to raise U.S. tariffs on Chinese vehicles to the level that China is charging.

Reporting by David Lawder; Additional reporting by David Shepardson; Editing by Muralikumar Anantharaman and Christopher Cushing

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