G20 Summit｜U.S. & China Reach Truce on Trade Dispute
The United States and China reached a 90-day ceasefire in a trade dispute that has rattled financial markets and threatened world economic growth. The breakthrough came after a dinner meeting Saturday between President Donald Trump and Chinese leader Xi Jinping at the Group of 20 Summit in Buenos Aires.
Following more than two hours of dinner talks between the two leaders, the White House said an increase of tariffs from 10 to 25 percent due to kick in on Jan 1 would now be put on hold, providing room for intense negotiations.
The agreement hashed out over steak in the Argentine capital Buenos Aires and lowered the temperature in a conflict that has spooked world markets.
Under the agreement, Trump agreed to hold off on plans to raise tariffs on Jan. 1 on $200 billion in Chinese goods. The Chinese agreed to buy a “not yet agreed upon, but a very substantial amount of agricultural, energy, industrial” and other products from the United States to reduce America’s huge trade deficit with China.
The truce buys time for the two countries to work out their differences in a dispute over Beijing’s aggressive drive to supplant US technological dominance.
image credit: internet
The truce is only partial.
Some $50 billion worth of Chinese imports already faces 25 percent tariffs, while the 10 percent tariffs — which target a massive $200 billion in goods — will also remain in effect.
Meanwhile, China has targeted $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 $267 billion in Chinese goods coming to the US.
And Saturday’s truce also contained an ultimatum.
The White House made clear that the 10 percent tariffs would still leap up to 25 percent 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 says make fair trade impossible.
Tough negotiations lie ahead, but the two leaders called it “a highly successful meeting”, a White House statement said.
“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 principal agreement has effectively prevented further expansion of economic friction between the two countries and has opened up new space for win-win cooperation,” said Chinese Foreign Minister Wang Yi.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said in a statement.
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