US, China Set to Take Action Against Each Other as Tensions Rise

Muriel Colon
December 14, 2018

"Watch for some important announcements!" which many presumed to be related to China's agreement to lower tariffs on US automobiles, reports CNBC.

Shares of Toyota Motor well as Hyundai Motor Co. tacked on gains before Daimler AG, Tesla Inc. and General Motors Co. also saw their stocks go up.

US stocks were up one per cent on Wednesday (Dec 12), though well below their session highs, as investors were hopeful about US-China trade relations after the latest comments from both sides and eyed some reassuring signs in British politics.

China-based music streaming company Tencent Music Entertainment was last up 7.9 per cent in its U.S. debut. American manufacturers have been hit hardest by the tariffs on imported metals, which have jacked up materials costs for cars built in the U.S. China's economy czar and the U.S. Treasury secretary discussed plans for talks on a tariff battle, the government said Tuesday, Dec. 11, 2018.

On Tuesday afternoon, US time, Trump curiously tweeted "Very productive conversations going on with China!" After a lengthy dinner with the Chinese President, Trump agreed to cancel an increase on Chinese import' tariff rates, which was scheduled to take effect in 2019.

Soybeans got an early boost after Trump said China was back in the market buying US beans.

The Wall Street Journal reported Wednesday that Chinese officials also agreed to replace the comprehensive industrial policy, Made in China 2025, which Trump officials have sharply criticized.

US President Trump's social media post does not include further details regarding the deal he made with Chinese President Xi Jinping. Mr Xi had conceded to the arrangement with the agreement that US President Donald Trump puts a hold on enacting the new China tariffs.

He said the U.S. wants China to buy more from the United States, but "much more importantly are the structural issues" including forced transfer and theft of American technology, "cyber intrusions", and "state directed investment".

The United States and China reached a 90-day cease-fire in a trade dispute that has rattled financial markets and threatened world economic growth.

Chinese state-owned companies bought at least 500,000 tonnes of USA soybeans, two US traders said, in deals valued at more than $180 million.

USA farmers stored soybeans after the fall harvest, instead of selling them to grain traders and processors, because of low prices and lack of alternative buyers.

Trump also said he would intervene in the Justice Department's case against a top executive at China's Huawei Technologies if it served national security interests or helped to close a trade deal.

Last year, BMW exported 65,000 vehicles to China from its factory in Spartanburg, South Carolina, which is BMW's largest factory in the world.

Daimler also exports its vehicles from the USA to China and it saw its shares go up by 2.7% in trading.

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