US and China reach trade war ceasefire
Trump puts increase in tariffs on hold to allow room for talks
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 dinner talks between the two leaders, the White House said an increase of tariffs due to kick in on January 1 would now be put on hold, providing room for intense negotiations.
The two leaders, who were attending the G20 summit, called it “a highly successful meeting.”
“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.
The United States and China reached a 90day ceasefire in a trade dispute that has rattled financial markets and threatened world economic growth. The breakthrough came after a dinner meeting on Saturday between President Donald Trump and Chinese leader Xi Jinping at the G20 summit in Buenos Aires.
Trump agreed to hold off on plans to raise tariffs January 1 on $200 billion (Dh734 billion) in Chinese goods. The Chinese agreed to buy a “not yet agreed upon, but very substantial amount of agricultural, energy, industrial” and other products from the US, to reduce America’s huge trade deficit with China, the White House said.
The truce, reached after a dinner of more than two hours, buys time for the two countries to work out their differences in a dispute over Beijing’s aggressive drive to supplant US technological dominance.
“It’s an incredible deal,” Trump told reporters. “What I’ll be doing is holding back on tariffs. China will be opening up, China will be getting rid of tariffs. China will be buying massive amounts of products from us.”
In a long-sought concession to the US, China agreed to label fentanyl, the deadly synthetic opioid responsible for tens of thousands of American drug deaths annually, as a controlled substance. And Beijing agreed to reconsider a takeover by US chipmaker Qualcomm that it ■ had previously blocked.
The White House announcement framed a victory for Trump and his unflinching negotiating tactics, securing a commitment from China to engage in talks on key US economic priorities, with little obvious concession by the US.
Notably, however, the White House appears to be reversing course on its previous threats to tie trade discussions to security concerns, like China’s attempted territorial expansion in the South China Sea.
“It’s great the two sides took advantage of this opportunity to call a truce,” said Andy Rothman, investment strategist at Matthews Asia. “The two sides appear to have had a major change of heart to move away from confrontation toward engagement. This changes the tone and direction of the bilateral conversation.”
Cut-throat tariffs
The United States and China are locked in a dispute over their trade imbalance and Beijing’s tech policies. Washington accuses China of deploying predatory tactics in its tech drive, including stealing trade secrets and forcing American firms to hand over technology in exchange for Chinese market.
Trump has imposed import taxes on $250 billion in Chinese products — 25 per cent on $50 billion worth and 10 per cent on the other $200 billion. He had also planned to raise tariffs on the $200 billion to 25 per cent, if he couldn’t get a deal with Xi. China has already slapped tariffs on $110 billion in US goods.
Now, both countries have 90 days to resolve their differences over Beijing’s tech policies. If they can’t, the higher US tariffs will go into effect on the $200 billion in Chinese imports. access to the