Trump calls 90-day truce in China trade war a big success
Victory seen for key political constituents while financial markets react with volatility
WASHINGTON— U.S. President Donald Trump on Monday portrayed his Saturday meeting with President Xi Jinping of China as an unabashed success, insisting that U.S. farmers and automakers will quickly see benefits from a trade truce that has yet to produce any concrete commitments.
Trump and Xi agreed during the G20 meeting in Buenos Aires to pause the trade war between the world’s two largest economies for 90 days and work to resolve several areas of tension, including the trade gap between what America imports from China and what China buys from the United States. But nothing beyond their official statements exist, and deep divisions remain, particularly related to China’s industrial policies and its treatment of U.S. firms.
That did not stop Trump from declaring victory for farmers, automakers and other key political constituencies in the wake of the meeting — statements that helped send volatile financial markets higher Monday morning.
“Farmers will be a very BIG and FAST beneficiary of our deal with China,” Trump said in a Twitter post Monday. “They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants.”
In a separate tweet late Sunday, Trump said China had agreed to reduce and remove tariffs on cars coming into Chi- na from the United States. The current tariff rate is 40 per cent, which China reached in response to Trump’s tariffs, and it was not clear to what level it would fall.
Chinese state media made no mention of such a commitment, and the disclosure took trade watchers and auto industry figures in both countries by surprise. Auto tariffs had not appeared in the public disclosures from either the U.S. or Chinese governments issued after the two sides reached their temporary truce.
It was unclear what China had agreed to do, if it had agreed to do anything at all. A spokesperson for the Chinese Foreign Ministry referred questions to the Commerce Ministry. That ministry was silent, and its weekly news conference is not until Thursday.
Despite Trump’s optimism about the ceasefire, his advisers were more cautious about the path ahead, which analysts say could be protracted and arduous given the longstanding differences between the two countries and the political risks for their leaders.
“This is the first time that we have a commitment from them that this will be a real agreement,” Steven Mnuchin, the Treasury secretary, said Monday on CNBC. “I’m very hopeful we can turn this into a real agreement.”
Mnuchin noted that China committed to purchase more than $1.2 trillion (U.S.) in unspecified U.S. products, but he emphasized that promises of structural changes to its industrial policies were more important. The Trump administration has been pressuring China to open its markets to U.S. companies without requiring joint ventures or forcing the sharing of intellectual property.
Other members of Trump’s economic team were even more reluctant to declare victory. Peter Navarro, Trump’s top trade adviser who was also at the dinner with Xi, told NPR on Monday, that the Trump administration must be forceful in ensuring that China lives up to his commitments. He said that Xi spent 30 minutes Saturday night outlining China’s promises and offering responses to more than 140 of Trump’s trade demands.
While both the United States and China have attempted to describe the meeting as “winwin” for both countries, Navarro, who is perhaps the administration’s most ardent China “hawk,” suggested that Trump essentially offered Xi a last opportunity to avoid more tariffs.
“We have given nothing away here; all we have done is given the Chinese time to do the right thing,” he said.