China announced a 90-day suspension on Friday of tariff hikes on US$126 billion of U.S. cars, trucks and auto parts following its cease-fire in a trade battle with Washington that threatens global economic growth.
The suspension is China's first step in response to President Donald Trump's Dec. 1 agreement to suspend U.S. tariff hikes for a similar 90-day period.
During that time the two sides will negotiate over American complaints about Beijing's technology policy and trade surplus.
China has indicated it plans to move ahead with the talks despite strains over the arrest of a Chinese technology executive in Canada to face possible U.S. charges related to a violation of trade sanctions on Iran.
Beijing will suspend a 25 per cent import charge on US$66 billion of cars and trucks and a 5 per cent charge on US$60 billion of auto parts, effective Jan. 1, the Finance Ministry announced.
The announcement helped give substance to Trump's agreement with his Chinese counterpart, Xi Jinping, after prolonged uncertainty caused jittery global financial markets to swing wildly.
The Chinese penalties were imposed in response to Trump's decision to slap 25 per cent tariffs on US$50 billion of Chinese goods and a 10 per cent charge on another US$200 billion. The second tariff was due to rise Jan. 1 until Trump agreed to the postponement.
The United States and other trading partners complain that Beijing steals or pressures companies to hand over technology in violation of its market-opening obligations. American officials also worry Chinese industry plans that call for state-led creation of global champions in robotics and other fields threaten U.S. industrial leadership.