China suspends tariff hikes on $126B of US cars, auto parts

Associated Press

BEIJING

China announced a 90-day suspension on Friday of tariff hikes on $126 billion of U.S. cars, trucks and auto parts after its cease-fire in a trade battle with Washington that threatens global economic growth.

The suspension is China’s first step in response to President Donald Trump’s Dec. 1 agreement to suspend U.S. tariff hikes for a similar 90-day period while the two sides negotiate over American complaints about Beijing’s technology policy and trade surplus.

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 U.S. charges related to a violation of trade sanctions on Iran.

Beijing will suspend a 25 percent import charge on $66 billion of cars and trucks and a 5 percent charge on $60 billion of auto parts, effective Jan. 1, the Finance Ministry announced.

The announcement helped give substance to Trump’s agreement with his Chinese counterpart, Xi Jinping, after prolonged uncertainty caused jittery global financial markets to swing wildly.

The Chinese penalties were imposed in response to Trump’s decision to slap 25 percent tariffs on $50 billion of Chinese goods and a 10 percent charge on another $200 billion. The second tariff was due to rise Jan. 1 until Trump agreed to the postponement.

The United States 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 Chinese industry plans that call for state-led creation of global champions in robotics and other fields threaten U.S. industrial leadership.

In other China news, the resumption of soybean sales to China this week is encouraging to American farmers who have seen the value of their crop plummet amid a trade war with the world’s second-largest economy, but producers see it only as a small step and say they need more federal aid.