China took a step toward extending its truce with the Trump administration Friday, announcing that it would temporarily suspend punitive tariffs imposed on American-made cars and auto parts as the U.S.-Chinese trade war ramped up.

But the gesture was somewhat hollow, analysts said, as the tariffs will simply return to their July level.

“Imposing additional tariffs on U.S.-made cars and auto parts was a forced move to counter U.S. trade protectionism,” the Ministry of Finance said in a statement Friday. “Suspending the taxes is a concrete step to implement the consensus reached by the two countries’ leaders.” 

The move was not a surprise, as it had already been disclosed by President Trump as part of an agreement he forged with his Chinese counterpart, Xi Jinping, during talks in Argentina at the end of last month aimed at calling a truce in the trade war.

But Friday’s announcement was the first confirmation from the Chinese side and was designed to maintain momentum in the negotiations. At the meeting in Buenos Aires, Trump gave Xi a 90-day reprieve from further increases in tariffs that he had already imposed on $200 billion worth of Chinese exports.


President Trump meets with Chinese President Xi Jinping, second from left, during their Dec. 1, 2018, bilateral meeting at the G-20 Summit, in Buenos Aires. (AP Photo/Pablo Martinez Monsivais, File)

“We hope both sides will, in accordance with the consensus reached by the two leaders, match words with deeds to speed up the negotiations aimed at scrapping all additional tariffs on the basis of mutual respect and on an equal footing,” the Finance Ministry said. 

Starting Jan. 1, tariffs on American-made cars and auto parts will fall from 40 percent to 15 percent for three months, returning to their level before Beijing and Washington began a tit-for-tat tariff war.

This will affect 144 products, the ministry said, including hybrid cars, diesel-engine trucks and seat belts. A 5 percent tariff increase on 67 other auto parts would also be suspended.

“This is a good signal that China and the United States are on track to solve the trade war,” said Wang Cun, director of the China Automobile Dealers Association’s import committee, according to Reuters. “Car makers might be ordering a large number of imported cars now.”

The announcement coincided with the release of new economic statistics showing that China’s economic slowdown is worsening, exacerbated by the trade war.

Retail sales fell to their slowest rate since 2003 last month, while industrial production was the weakest in almost three years, according to official statistics. Stock markets in Hong Kong, Shanghai and Shenzhen all fell by about 2 percent Friday.

China’s central bank governor, Yi Gang, warned Thursday night of “rising downward pressure” on the world’s second-largest economy.

“The way regulators are describing the economy suggests they are increasingly concerned about growth,” Andrew Polk of the Trivium China business consultancy wrote in a note to clients.