Trump and Xi agreement buys time in trade war

US President Donald Trump said the G20 Summit was a success for America’s interests

US President Donald Trump said the G20 Summit was a success for America’s interests

Some economists said Xi might be ready to negotiate in earnest.

However, while the agreement provides breathing room for the US and China - and the global trading system as a whole - a final resolution to the US-China trade war remains far from certain.

President Donald Trump on Sunday announced that China had agreed to rollback its tariffs on American automobiles below 40 percent.

On Monday, China's foreign ministry said economic teams in both countries had been instructed to "intensify talks" towards removing all tariffs following the G20 meeting.

Trump's administration will postpone another tariff increase scheduled for January 1, 2019, Reuters reports, while Chinese president Xi Jinping has agreed to once again source farm and energy products from the United States.

Both sides will "immediately begin negotiations on structural changes" that Washington has been demanding for more than a decade.

Beyond the trade deficit that occupies much of Trump's attention, the USA has a long list of grievances it wants to address with Beijing in any upcoming negotiations.

10 percent tariffs on US$200 billion worth of goods, effective September 24, 2018.

Trump's tweet did not explain which tariffs would be reduced or removed, or when China would act.

"The Chinese public needs to keep in mind that China-U.S. trade negotiations fluctuate".

He did not provide a new level for the Chinese tariffs, and Beijing did not immediately confirm the statement. The tariffs already implemented by the two sides are substantial, but the additional tariffs threatened by the U.S. would mark an even more dramatic escalation were they to come into force.

Despite the questions, US President Donald Trump was in an ebullient mood, promising benefits to US farmers and vehicle companies.

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Mnuchin stressed that the two leaders had detailed conversations on 142 items and said the goal now was to turn the talks into a "real agreement".

According to a readout from the White House, the two leaders agreed "that they will endeavor to have this transaction completed within the next 90 days".

Investors were pleased by the news. The Dow celebrated by rising hundreds of points.

"My meeting in Argentina with President Xi of China was an extraordinary one".

Beyond trade, Washington and Beijing find themselves increasingly entangled on hard-to-resolve issues.

Over a steak dinner last weekend at the G20 Summit in Buenos Aires, Argentina, the United States and China called a trade war truce. But the trade spat between the two countries is far from resolved. The US spent 716 Billion Dollars this year.

Beijing has tried without success to recruit France, Germany, Japan and other government as allies against Trump.

Contrast that with the US statement, which focused more narrowly on the truce's benefits for its side.

According to experts, agreeing to Washington's demands would undermine the Communist regime's plans to achieve dominance in high-technology industries, as outlined in the economic blueprint "Made in China 2025".

Still, Kuijs said Chinese leaders might have hinted to the Americans of possible concessions.

In China, tariffs have also weighed on the economy. Beijing is unhappy with US limits on exports of "dual use" technology with possible military applications.

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