Some industry participants expected China to drop the tariffs soon after the Trump-Xi meeting. In doing so, he spread confusion and sent the stock market tumbling while essentially threatening a trade war against China over what his administration perceives as trade abuses.
A proposed cut by China to tariffs on US vehicle imports created confusion in Washington, a day after it was announced by US President Donald Trump.
Global investors, who had feared for months that a protracted trade war could hurt economic growth, seemed to cheer the cease-fire on Monday, but USA markets slid back on Tuesday as it became clear that there were few concrete commitments that came out of the discussions so far. "It will always be the best way to max out our economic power", he said.
European, Japanese and South Korean automakers would ultimately benefit from a flat, tariff-free rate on autos, Hufbauer said.
"I will be very surprised - it could happen - I'll be very surprised if China reduces its tariffs on autos from all sources and all descriptions to zero percent", he said.
White House economic adviser Larry Kudlow said earlier this week the USA won Chinese commitments to buy more than $1 trillion in American products.
They said they would hold off on imposing additional tariffs for 90 days starting on December 1 while they sought a solution to their trade disputes.
That approach so far has amounted to slapping tariffs on US$250 billion (NZ$361 billion) of Chinese imports and vowing to impose penalties on all other imports if China doesn't make changes.
Following a meeting between Trump and China President Xi Jinping in Argentina, Trump took to Twitter to announce that China has "agreed to reduce and remove tariffs" on cars imported from U.S. factories.
At his political rallies and news conferences, Trump often praises the increase in US military spending during his almost two years in the White House.
"There's a specific understanding that we're going to now turn the agreement the presidents have into a real agreement over the 90 days", Mnuchin told reporters during a gaggle outside the West Wing, while the president was busy tweeting on the topic and said he has a "very strong and personal relationship" with President Xi. "China trade truce because China has agreed to start buying agricultural products from American farmers immediately", said Monica Tu, an analyst at researcher Shanghai JC Intelligence Co.
"If it is, we will get it done", Trump wrote in a Twitter post. But it raised its tariff on US cars to 40 percent earlier this year in retaliation for Trump's tariffs on Chinese goods.
In a series of tweets, Trump celebrated the opening of negotiations between China and the US.
The last sentence is certainly true, but as for the first, there's no mention of such an agreement in the statements issued by the White House and the Chinese Foreign Ministry.
The United States and China have agreed to temporarily hold off on new tariffs for 90 days while the two nations try to negotiate a new trade deal. Let the negotiations begin.
Wang added that the two also agreed to open markets to each other, and that China will work to gradually resolve USA concerns in the process of further opening-up.