WASHINGTON – President Donald Trump’s top economic advisers pushed back Monday on his claim that China has agreed to eliminate tariffs on U.S. auto imports, saying no such agreement had been struck.
The unusual dispute was the latest to suggest that Trump’s handshake agreement on trade during a working dinner Saturday night in Argentina with Chinese President Xi Jinping remains open to divergent interpretation, even in the White House.
On Sunday night, after returning to the White House from the Group of 20 economic summit in Argentina, Trump declared on Twitter that China “has agreed to reduce and remove tariffs on cars coming into China from the U.S.”
If true, that would mark an achievement for the White House. It caused auto stocks to jump Monday as part of a broad stock market gain based on the pause in the U.S.-China trade war.
But Trump’s top economic advisers made it clear that no agreement to reduce and remove the tariffs yet exists, despite Trump’s boast. “We don’t yet have a specific agreement on that, but I will just tell you … we expect those tariffs to go to zero,” said Larry Kudlow, Trump’s top economic adviser.
Chinese officials did not confirm any agreement. China had reduced the tariff to 15 percent on July 1 for car imports from all nations. But days later, it boosted it to 40 percent for U.S. imports in response to tariffs the Trump administration had levied in the trade dispute.
U.S. companies sold about $10.2 billion worth of passenger vehicles in China in 2017, the Commerce Department said. The U.S. tariff on auto imports from China is 27.5 percent.
Trump touted his working dinner with Xi, after the G-20 summit in Buenos Aires, as an “extraordinary” meeting that could bring about “massive and very positive change, on trade and far beyond.” “Relations with China have taken a BIG leap forward!” Trump tweeted.
Other than Trump’s agreement to delay any new tariffs for 90 days, however, officials from the two economic superpowers offered different interpretations of what the two leaders promised.
Treasury Secretary Steven Mnuchin gave mixed messages, appearing to confirm the auto tariff cut but then backing off. “There is an immediate focus on reducing auto tariffs,” Mnuchin said. “There’s a lot of work to be done over the next 90 days.”
White House trade adviser Peter Navarro also wouldn’t confirm China was lifting auto tariffs. He told NPR that the issue “certainly came up in discussions” between Trump and Xi. “That’s just one of the many tariffs that have to be reduced,” Navarro said.
Kudlow said he believed that China had committed to reduce the auto tariffs. “That is my understanding, that is President Trump’s understanding and hopefully we’ll see some … immediate action,” he said.
Robert Lighthizer, the U.S. trade representative, will lead the negotiations with China on auto tariffs and other trade issues during the 90-day truce, which begins on Jan. 1, Kudlow said. The two nations are “pretty close” to some agreements on China’s alleged theft of U.S. intellectual property and policies that force U.S. companies to transfer technology to Beijing in order to do business in China, he said. “We’re going to move very fast,” Kudlow said.
Trump had threatened to increase U.S. tariffs to 25 percent from 10 percent on $200 billion in Chinese imports, starting on Jan 1. He pushed the deadline back to March 1 after Xi said China would purchase more U.S. agricultural and energy products to help ease the trade imbalance.
China acknowledged that but neither side provided any details or timeline, so it was difficult to know whether the deal marked a breakthrough or not. Kudlow said, “We have a lot of things to do, a lot of hurdles.”