Trump declares truce with China
President Donald Trump announced on Friday a “very substantial phase one” deal to end the trade war with China in which Washington will shelve higher tariffs on Chinese goods that were slated to come into effect next week. In return, Beijing will buy American agricultural produce worth billions.
The initial deal is expected to be signed by Trump and Chinese President Xi Jinping when they meet in November in Chile for the Asia-Pacific Economic Cooperation summit. Phase two of the deal will follow “almost immediately” after phase one and Trump said there could be a third phase, if needed.
“We’ve come to a very substantial phase one deal,” Trump told reporters in joint remarks with China’s chief negotiator, vicepremier Liu He, in the Oval Office at the White House.
The development halts, if not ends, the escalation in the trade dispute between the world’s two biggest economies triggered last March by Trump’s announcement of tariffs on Chinese goods over several long-standing issues. Beijing had retaliated with tariffs, strategically targeting Trump’s key voter base farmers. The move had rattled Trump and he had gone on to accuse Beijing of political interference. Relief for US farmers was China’s most significant concession in the deal announced by Trump on Friday.
China will now buy American agricultural produce worth $40-50 billion annually, give an unspecified undertaking on how it handles its currency, offer protection of intellectual property rights of American businesses and grant foreign institutions access to its financial sector.
In return, the US won’t implement the higher import duty of 30% - up from the existing 25% - on $250 billion worth of Chinese goods.