China, US declare 90-day halt to new tariffs
BUENOS AIRES: China and the United States agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days.
The White House said on Saturday that President Donald Trump told Chinese President Xi Jinping during high- stakes talks in Argentina that he would not boost tariffs on US$ 200 billion of Chinese goods to 25 per cent on Jan 1 as previously announced.
Beijing for its part agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, the White House said in a statement.
The two sides would also launch new trade talks to address issues including technology transfer, intellectual property, nontariff barriers, cyber theft and agriculture, it said.
If no deal is reached within 90 days, both parties agreed that the 10 per cent tariffs will be raised to 25 per cent, the White House said.
Yesterday, China’s state- run media lauded the “important consensus” reached by the two leaders but did not mention the 90-day deadline.
Speaking to reporters on Air Force One, Trump hailed his agreement with Xi.
“It’s an incredible deal,” Trump said. “What I’d be doing is holding back on tariffs. China will be opening up. China will be getting rid of tariffs.”
He said under the deal China would buy a “tremendous amount of agricultural and other product” from the United States. “It’ll have an incredibly positive impact on farming.”
State Councillor Wang Yi, the Chinese government’s top diplomat, told reporters in Buenos Aires that the two sides believed the agreement “effectively prevented the expansion of economic frictions between the two countries”.
“Facts show that joint interests between China and the United States are greater than the disputes, and the need for cooperation is greater than frictions,” he said.
BUENOS AIRES: US President Donald Trump and China’s Xi Jinping agreed 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, who were in Buenos Aires for a summit of the G20 countries, called it “a highly successful meeting,” the White House said.
“The principal agreement has effectively prevented further expansion of economic friction between the two countries and has opened up new space for winwin cooperation,” said Chinese Foreign Minister Wang Yi.
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.
However, the truce is only partial.
Some US$ 50 billion worth of Chinese imports already face 25 per cent tariffs while the 10 per cent tariffs, which target a massive US$ 200 billion in goods, will also remain in effect.
Meanwhile, China has targeted US$110 billion worth of US imports for tariffs.
If there is any further retaliation, Trump has warned, he will slap punitive duties on the remaining US$ 267 billion in Chinese goods coming to the US.
The truce also contained an ultimatum.
The White House made clear that the 10 per cent tariffs would still leap up to 25 per cent if China doesn’t meet US demands in 90 days.
These include China stopping a host of trade barriers, intellectual property theft and other actions that Washington say make fair trade impossible.
Tough negotiations lie ahead, but Trump was upbeat.
“This was an amazing and productive meeting with unlimited possibilities for both the US and China. It is my great honour to be working with President Xi,” he said in a statement.
Trump and Xi expressed optimism the moment they and top aides sat down in Buenos Aires at a long hotel table adorned with flowers.
“Only with cooperation between us can we serve the interest of both peace and prosperity,” Xi said.
The meeting – featuring a menu of sirloin steak, caramel rolled pancakes and Argentine wine – went on longer than scheduled.
And while it may have been tacked on to the end of two days of G20 diplomacy, it was in many ways the main event of the weekend.
German Chancellor Angela Merkel, who was also attending the G20, spoke for many when she urged progress.
“We all realise that we are indirectly influenced by the fact that Sino-American economic relations are not running as smoothly as a world order needs,” she said.
On the US side at the dinner, Trump was accompanied by advisers such as Larry Kudlow and Treasury Secretary Steven Mnuchin, who are widely seen as wanting a deal. But hawkish advisers like Peter Navarro and US Trade Representative Robert Lighthizer were also present. Navarro’s inclusion in particular was a surprise as he has harshly criticised China, accusing its leadership of duplicity.
Trump, as often in his diplomatic dealings, appears to consider his personal chemistry with Xi the most important factor in the success of the negotiations.
He has prided himself on building a good relationship with the Chinese leader, even though he acknowledges it may have trouble surviving the growing crisis.
“He may not be a friend of mine anymore but I think he probably respects me,” Trump said in September.
At the dinner, however, he was more upbeat, saying that his ties to Xi were “a very primary reason” for considering a deal possible.