US, China agree on trade war ceasefire

Hike in tariff to 25% from January 1 put on hold Huge existing duties to remain in force

Buenos Aires: China and the United States agreed to a ceasefire in their bitter trade war on Saturday after high- stakes talks in Argentina between US President Donald Trump and Chinese President Xi Jinping.

Buenos Aires, Dec. 2: US President Donald Trump and China’s Xi Jinping agreed on Saturday to suspend any new tariffs in the escalating trade war between the world’s two largest economies, even if huge existing duties will remain in place.

Following more than two hours of dinner talks between the two leaders, the White House said an increase of tariffs from 10 to 25 per cent due to kick in on January 1 would now be put on hold, providing room for intense negotiations. The agreement, hashed out over steak in the Argentine capital Buenos Aires, lowers the temperature in a conflict that has spooked world markets. The two leaders called it “a highly successful meeting,” a White House statement said.

“The agreement effectively prevented further expansion of economic friction and opened up new space for win- win cooperation,” said Chinese foreign minister Wang Yi.

“It’s an incredible deal,” Trump told reporters aboard Air Force One on the flight home to Washington, adding it would have an “incredibly positive impact” on American farmers.

Under the agreement, Trump is shelving a plan to raise existing tariffs of 10 per cent to 25 per cent from the start of next year.

Xi avoids further immediate pressure on China’s slowing economy, while Trump — scarred by last month’s midterm elections that saw the Democrats regain control of the House of Representatives — can ease damage to agricultural US states that export to China, particularly soybean producers. “China will be buying massive amounts of product from us,” Trump said.