Published: Mon, December 03, 2018
Finance | By Loren Pratt

Truce in Trade War After Trump, Xi Dinner in Argentina

Truce in Trade War After Trump, Xi Dinner in Argentina

Trump and Xi, who were in the Argentinian capital over the last two days for a summit of G20 countries, had gone into the meeting in a bid to pull the world's top two economies from the brink of a full-fledged trade war.

"It's an incredible deal", Trump told reporters aboard Air Force One. "It is my great honour to be working with President Xi".

The White House said a threatened increase of tariffs on $200 billion worth of Chinese goods from 10 to 25 percent, which was set to take effect on January 1, would be put off for 90 days.

Asian markets rose after the presidents of China and the USA reached a temporary truce in their trade war. "China has agreed to start purchasing agricultural product from our 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. "If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent", she said.

The news is likely to bring cheer Monday to global financial markets, which have been sensitive to the escalating trade battles between China and the United States. Beijing will no doubt attempt to make good on its pledge to increase purchases of USA goods, turning probably to soybeans and potentially energy.

In what the White House called a "wonderful humanitarian gesture", the White House said that Xi would crack down on fentanyl, the opioid painkiller largely made in China that is behind an epidemic of USA overdoses.

The White House is calling the Chinese president's decision a "wonderful humanitarian gesture".

President Trump and China's President Xi Jinping agreed Saturday to a 90-day halt on new tariffs, hailed as a ceasefire in the countries' trade war.


"My relationship is very special, the relationship that I have with President Xi", Trump said as the two men were seated. "Only with cooperation between us can we serve the interest of both peace and prosperity", he said.

The healthy increases paved the way for sharp rises on European and United States exchanges later on Monday with futures trade seeing the FTSE100 opening up by 1.6% and the Dow Jones industrial average on Wall Street expected to leap 2%. The other key attendees for the U.S., according to the White House, were Secretary of State Mike Pompeo, Treasury Secretary Steven Mnuchin, White House Chief of Staff John Kelly, U.S. Trade Representative Robert Lighthizer, National Security Adviser John Bolton, the president's son-in-law Jared Kushner (who is a senior adviser) and Larry Kudlow, assistant to the president for economic policy.

During the meeting in Buenos Aires, the USA agreed not to increase tariffs on January 1, as had been planned, while China agreed to immediately buy more agricultural products from U.S. farmers.

The move, if realized, would bolster USA auto manufacturers who were hit hard when China ramped up levies on US -made cars in July as part of a broad package of retaliatory tariffs amid a sprawling trade war between Washington and Beijing.

The US charges a 27.5 percent tax on imported cars from China.

In other key results from the talks, the US promised to uphold the one-China policy, Wang said, while China threw its support behind further meetings between Trump and North Korean leader Kim Jong Un.

In its communique Saturday at the conclusion of the leaders' summit, the G-20 called for reform of the WTO to improve its functioning and said the group would review progress made by the trade organization at next year's summit in Japan.

At the same time, USA farmers have been hurt by reduced Chinese imports of soybeans and other products.

Mr. Trump has used tariffs and other get-tough measures to force trade negotiations on several fronts, including prodding the European Union to the bargaining table and reworking the 24-year-old pact with Mexico and Canada.

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