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Trump agrees to pause USA trade war with China

06 December 2018

"If it happens, it goes down as one of the largest deals ever made".

Ultimately, a meaningful, lasting deal is unlikely in the 90-day window.

President Trump has agreed that on January 1, 2019, he will not increase tariffs on $200 billion worth of product from 10% to 25%.

Reuters notes the United States now charges a 27.5 percent tariff on vehicles with a "made in China" label.

The United States said Saturday that it agreed in a long-awaited summit with China to suspend new tariffs for 90 days as the two powers seek to end a trade war.

In a surprise announcement tweeted Sunday night, Trump also said China would "reduce and remove" tariffs of 40 percent on cars, though Beijing has yet to confirm the move.

While Trump and Lopez Obrador both said they had a "great" first phone call after the latter's landslide victory in July, the two were at odds over the renaming of the updated agreement, with Trump insisting on listing the United States before other countries.

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President Trump left the Group of 20 summit in Argentina with an agreement not to raise tariffs on Chinese goods in the next 90 days, the White House said.

The US agreed to postpone further tariffs on Chinese goods - a halt that applies to its plans to raise tariffs from 10% to 25% on nearly 6,000 items, starting 1 January.

China's tariff on vehicle imports from all over the world was cut to 15 per cent from 25 per cent.

"The good news is that this truce should be seen as Washington recognizing the potential damage on the United States economy if tariffs escalate further", said Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management.

Xi also said that he was open to approving the previously unapproved Qualcomm-NXP deal should it again be presented to him, the White House added.

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.

Qualcomm and NXP did not immediately respond to requests for comment late on Saturday.

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Following the meeting, both sides proclaimed the meeting a success, with Trump pledging to pause the introduction of stricter trade measures ahead of further negotiations.

Trump, as often in his diplomatic dealings, appears to consider his personal chemistry with Xi the most important factor in the success of the negotiations. "It's very clear that voters in Iowa started to have a change of heart", Yen Chenshen, a researcher at the Institute of worldwide relations, National Chengchi University in Taiwan, told Sputnik.

After the meeting between Trump and Xi however, the White House said the deal could be back on.

During the meeting, Trump and Xi were seated across from each other in the middle of the table, surrounded by their respective delegations. "Farmers, I LOVE YOU!" he said.

But the United States leader didn't specify when the change would happen or what the new tariff level would be, CNN reported on Monday. For decades, Beijing hasn't taken any concrete actions to fulfill its promises.

Sacha Tihanyi, deputy head of emerging markets for TD Securities, warned, however, that "the overarching concerns in the US-China relationship remain, and thus should imply caution for markets past the short-term". This is because of Xi Jinping's industrial policy, "Made in China 2025", an aim to make China a world leader in technologies of the future.

The stock market jumped after the news was announced.

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Trump agrees to pause USA trade war with China