President Trump claims China had agreed to reduce its 40% tariff
After a long period of suffering, European auto stocks surged on Monday as they headed towards their best session in just over two years following a mysterious Tweet from President Trump claiming China had agreed to reduce its 40% tariff on US-made cars.
What’s even stranger, is shares of German companies like Daimler and BMW exceeded US auto stocks due to the fact that numerous cars they export to China are American made.
“China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%,” Trump Tweeted.
Despite Trump’s claim, a top Chinese trade official refused to comment on the Tweet during a press conference the next morning.
Trump tweeted following the US and China’s agreement to “temporary” 90-day trade truce, which involves China buying more US agricultural products to try and support narrowing its trade surplus with the US.
The President also agreed to suspend proposed increases and extensions for US tariffs.
Beijing increased tariffs on U.S. auto imports to 40% back in July which forced many carmakers to raise prices.
Before Trumps’ Tweet, China warned that the continuing escalation of the country’s trade war with the United States could lead to a repeat of the same disasters of the 20th century, as they did before World War 2.
China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.
— Donald J. Trump (@realDonaldTrump) December 3, 2018
A reduction in Chinese tariffs would profit Daimler and BMW more than US carmakers like General Motors and Ford, according to Bloomberg.
But Chinese carmaker shares pared their gains as shares of Chinese car dealerships escalated.
China’s share of US Treasuries holdings has had the sharpest decline since January as continuing trade tensions with Washington drove the world’s largest economy to take steps to stabilize.
Trump proposes to withdraw from a 144-year-old postal treaty which has allowed the country to send ultra cheap packages., according to the New York Times.
The treaty has been undercutting American competitors and overwhelming the market with cheap consumer products.