China Deal Means Big Changes for Automotive Industry

China Deal Means Big Changes for Automotive Industry
China Deal Means Big Changes for Automotive Industry

President Trump is bringing a positive message to the American people with regard to trade relations between the two countries. Taking to Twitter, Trump shared that Beijing’s representatives had confirmed a plan to “reduce and remove” the extremely high, punitive tariffs against our automotive industry. At around 40 percent, these tariffs have significantly hampered US exports over the past few months.

Key Facts

• “My meeting in Argentina with President Xi of China was an extraordinary one,” the tweet reads. “Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!”
• The Chinese government has thus far refused to confirm the news. However, they have confirmed a “truce” between our government and theirs. Trump’s consistent pressure over the past few months seems to be achieving his original intended goal!
• Decisions started with an agreement to totally avoid any increases in tariffs on either US or Chinese products for a minimum of 90 days. This “rest period” is designed to give both sides time to find more concrete solutions to the trade war. It also gives breathing space for talks between governments.
• Much was at stake if Trump had not managed to reach a tentative truce, at least for China, anyway. The President had previously stated he would add a new 10 percent to 25 percent tariff on around $200bn worth of goods, with more tariffs added in the first quarter of the new year.
• This may all seem a little bit vague, but the potential reason for celebration lies in the numbers. Tariffs added in 2018 totalled just $250 billion in traded goods; Trump was planning on tacking on an additional $267 billion in 2019.
• China should be celebrating Trump’s ability to negotiate right now. Without him, they would have been forced to pay a total of $506 billion to the USA! This is a real win for America and our hard-hitting President, too.