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China To Cut Tariffs On U.S. Cars After Trade War Truce

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China To Cut Tariffs On U.S. Cars After Trade War Truce

China has agreed to “reduce and remove” tariffs below the 40 percent level that Beijing is currently charging on U.S.-made vehicles, U.S. President Donald Trump said, as a trade war truce between the two countries gathers pace, cheering markets.

Trump and Chinese President Xi Jinping agreed to halt new tariffs during talks in Argentina on Saturday, following months of escalating tensions on trade and other issues.

In a meeting lasting two and a half hours, the United States agreed not to raise tariffs further on Jan. 1, while China agreed to purchase more agricultural products from U.S. farmers immediately.

The two sides also agreed to begin discussions on how to resolve issues of concern, including intellectual property protection, non-tariff trade barriers and cyber theft.

But the White House also said the existing 10 percent tariffs on $200 billion worth of Chinese goods would be lifted to 25 percent if no deal was reached within 90 days, once again setting the clock ticking.

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Tweeting on Sunday night, Trump said: “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%”.

He gave no details, and there was no immediate response from the Chinese government. Neither country had mentioned auto tariffs in their official read-outs of the Trump-Xi meeting.

U.S. Trade Representative Robert Lighthizer said last week he was examining all available tools to raise U.S. tariffs on Chinese vehicles to the 40 percent that China was charging on U.S.-produced vehicles.

Chinese state media gave a cautious welcome on Monday to the trade war truce.

But in an editorial, the official China Daily warned that while the new “consensus” was a welcome development and gave both sides “breathing space” to resolve their differences, there was no “magic wand” that would allow the grievances to disappear immediately.

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“Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath,” it said.

Chinese shares, commodities and the yuan currency surged even as uncertainly remains about the deal.

The benchmark Shanghai Composite index rose 2.9 percent and blue-chip shares surged 3.1 percent. Shares in Hong Kong also jumped, with the Hang Seng index adding 2.7 percent.[.SS]

Still, analysts cautioned the deal may have only bought some time for more wrangling over deeply divisive trade and policy differences, and said China’s economy will continue to cool regardless under the weight of weakening domestic demand.

“This is a relief rally,” said Paul Kitney, chief equity strategist at Daiwa Capital Markets in Hong Kong.

The agreement “is not a ceasefire, it’s just a de-escalation. The existing tariffs are still having a negative impact on the Chinese economy, they haven’t gone away”.

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China’s factory activity grew slightly in November, a private survey showed on Monday, though new export orders extended their decline in a further blow to the sector already hurt by the Sino-U.S. trade frictions.

“It’s 90 days. It’s nothing and it doesn’t really make any difference. People have already started to reconsider their sourcing arrangements,” said Larry Sloven, who has been sourcing and manufacturing in China for three decades.

“Nobody wants to live in a false reality.”

Widely read Chinese tabloid the Global Times, published by the ruling Communist Party’s official People’s Daily, warned people had to have realistic expectations.

“The Chinese public needs to keep in mind that China-U.S. trade negotiations fluctuate. China’s reform and opening-up’s broad perspective recognizes that the rest of the world does things differently,” it said in its editorial.

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Zimbabwe Central Bank Abandons Quasi Dollar

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Zimbabwe Central Bank Abandons Quasi Dollar

Zimbabwe Central Bank has abandoned the quasi dollar it introduced in 2016.  The peg of one Zimbabwe dollar to one US dollar has not worked as the black market rate has been in the range of three and a half to four Zimbabwe dollars to one U.S. dollar.

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Economists say this move could lead to jitters in countries that hold the peg, including Saudi Arabia and Hong Kong.

Zimbabwe has long been dealing with currency instability that in 2009, it introduced the US dollar, euro, and the South African rand as legal tenders it thought would stem the wild round of hyper-inflation.

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FIRS Directs Banks To Lift Liens Placed On Tax Defaulters’ Accounts

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FIRS Directs Banks To Lift Liens Placed On Tax Defaulters' Accounts

The Federal Inland Revenue Service (FIRS) has directed banks to lift for 30 days the liens placed on bank accounts of alleged tax defaulters.

FIRS explained that it took the step because large numbers of defaulting taxpayers have besieged its offices in than effort to regularise their tax positions.

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In September, FIRS Boss Babatunde fowler had said the service was going after six thousand defaulters whose bank accounts would be frozen until they pay up.

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KPMG, one of the big four auditors in the world, had accused FIRS of going draconian by directing banks to freeze accounts of suspected tax defaulters.

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African News

Total Discovers Gas Off Southern Coast of South Africa

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Total Discovers Gas Off Southern Coast of South Africa

Patrick Pouyanne, CEO of French energy giant, Total, says his company has made a significant discovery of gas, off the southern coast of South Africa.

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Total says potential quantities could be around one billion barrels of global resources, gas and condensate light oil. The country currently imports fuel from Mozambique.

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South Africa’s Mineral Resources Minister, Gwede Mantashe, says the discovery was a potentially major boost for the economy.

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