The world’s two largest economies have agreed to a small truce in their escalating trade war after a meeting between presidents Donald Trump and Xi Jinping following the G-20 summit.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said in a statement released as he flew back to the United States from Argentina on Air Force One. “It is my great honor to be working with President Xi.”
Trump agreed that he will leave the tariffs on $200 billion worth of Chinese products at the 10 percent rate, and not raise it to 25 percent, for now, as he has threatened to do come Jan. 1, according to a White House statement.
“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial and other product from the United States to reduce the trade imbalance between our two countries,” said White House Press Secretary Sarah Sanders. “China has agreed to start purchasing agricultural product from our farmers immediately.”
Trump and Xi also “agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, according to the White House statement. “Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.”
Some of the details were echoed by Chinese Foreign Minister Wang Yi, who confirmed that both countries will step up negotiations.
The news is likely to bring cheer Monday to global financial markets, which have been sensitive to the escalating trade battles between China and the United States.
At the dinner, Xi also agreed to designate fentanyl as a controlled substance, meaning that people selling the powerful opioid to the United States will be subject to China’s maximum penalty under the law.
The White House is calling the Chinese president’s decision a “wonderful humanitarian gesture.”
Trump, sitting across from Xi at a long banquet table, described their relationship as “incredible” and predicted that would mean “we’ll probably end up getting something that’s good for China and good for the United States.”
In his remarks, the Chinese president noted, “it’s been a long time since our previous meeting and a lot of things have taken place.”
Xi added, “Only with cooperation between us can we serve the interest of world peace and prosperity.”
The 2½-hour meal, which was moved up an hour earlier than its original start time following the conclusion of the G-20 leaders’ meeting here, included a group of top officials from both sides.
Among those at the table for the United States: Trade policy adviser Peter Navarro, seen as the most hawkish member of Trump’s team when it comes to economic issues with China. The other key attendees for the U.S., according to the White House, were Secretary of State Mike Pompeo, Treasury Secretary Steven Mnuchin, White House Chief of Staff John Kelly, Trade Representative Robert Lighthizer, National Security Adviser John Bolton, the president’s son-in-law Jared Kushner (who is a senior adviser) and Larry Kudlow, assistant to the president for economic policy.
Many major business leaders in both the United States and China had hoped for some sort of truce or partial deal in what is seen as an escalating trade dispute between the world’s two largest economies.
Despite months of complaints by the United States and the U.S. imposing tariffs on about $250 billion worth of Chinese goods, Beijing “has not fundamentally alerted its unfair, unreasonable, and market-distorting practices,” according to a report issued last week by Lighthizer.
Observers feared that if no progress was made at the Trump-Xi dinner, the U.S. president would make good on his threat to double the amount of Chinese goods facing punitive taxes, and escalate tariffs to a 25 percent level at the start of the new year.
China, in response, had been threatening to impose taxes on an additional 5,000 types of American imports worth about $60 billion. (VOA News)
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