WASHINGTON — President Donald Trump left his top advisers scrambling on Monday to explain a trade deal he claimed hed struck with China to reduce tariffs on U.S. cars exported to the country — an agreement that doesnt exist on paper and hasnt been confirmed in Beijing.

In the day after Trump announced the deal in a two-sentence Twitter post, the White House provided no additional information. At a briefing in Beijing, a spokesman for the foreign ministry declined to comment on any changes to car tariffs.

Questioned about the agreement on Monday, Treasury Secretary Steven Mnuchin and Trumps top economic adviser, Larry Kudlow, dialed back expectations and added qualifiers.

"Ill call them commitments at this point, which are — commitments are not necessarily a trade deal, but its stuff that theyre going to look at and presumably implement," Kudlow told reporters at an official White House briefing that followed TV interviews and informal briefings by him and Mnuchin earlier in the day.

The apparent move on auto tariffs was part of a broader trade truce struck by Trump and Chinese President Xi Jinping during a dinner in Buenos Aires on Saturday night. As part of that the U.S. said it had agreed to hold off on raising tariffs Jan. 1 while negotiations took place. Kudlow initially said that the Chinese had 90 days from Jan. 1 to come up with "structural changes" regarding intellectual property protections, forced technology transfer and other issues.

The White House later corrected him to say that the 90 days actually began on Dec. 1, Saturday.

Trumps tweet, which moved stocks of automobile companies across the globe, followed the dinner at the Group of 20 summit in Argentina. There, all sides agree, the American president agreed to postpone an increase in tariffs on Chinese imports to 25 percent from 10 percent, which was scheduled to take effect Jan. 1, in exchange for negotiations on broader economic disputes.

"I think there is a specific understanding that we are now going to turn the agreement the two presidents had into a real agreement in the next 90 days," Mnuchin told reporters at the White House on Monday. "Im taking President Xi at his word, at his commitment to President Trump. But they have to deliver on this."

He didnt say precisely what China committed to do.

The uncertainty underscored the risk entailed by Trumps eagerness to strike deals without nailing down details in advance. The confusion was exacerbated by the absence of a joint statement from the U.S. and China following the dinner. Financial markets were left struggling to digest talks that the White House portrayed as a major victory for the president.

"Thats what happens when you dont have the detailed negotiations going into the summit" and end up with the "broad swath of a 35,000-foot deal," said Bonnie Glaser, a China expert at the Center for Strategic and International Studies in Washington. "Its risky. Theres certainly no guarantees that it will produce the outcomes that we want."

Officials in Beijing did not respond to requests for an explanation and neither did the Chinese embassy in Washington.

Trump nevertheless praised himself for the dinner, and abandoned nuance in claiming on Twitter that China had agreed to immediately buy more U.S. farm products, in addition to dropping car tariffs. Mnuchin, in an interview with CNBC on Monday, put a $1.2 trillion price tag on Chinas additional trade commitments, but emphasized the details of how they get there still need to be negotiated.

China imposed a retaliatory 25 percent tariff on imports of cars from the U.S. over the summer in response to Trumps own tariffs. Thats added on top of a 15 percent tariff that Beijing charges for imports from the rest of the world, leaving U.S. auto exporters facing a 40 percent levy at the Chinese border.

In his briefing with reporters, Kudlow said he assumed that the Chinese would eventually drop their auto tariffs altogether. Such a change would have to apply to all countries under World Trade Organization rules.

"We dont yet have a specific agreement on that," Kudlow said, apparently contradicting Trumps tweet on the matter. "But I will just tell you, as an involved participant, we expect those tariffs to go to zero."

Asked why the auto tariffs werent mentioned in statements the U.S. and China issued after the dinner, Kudlow inexplicably insisted that they were. "I dont agree with that," he said.

Source: Autonews

December 4, 2018