The US and China have agreed a 90-day ceasefire in their bitter trade war after Donald Trump met with Xi Jinping at the G20 meeting in Argentina.
After the two-and-a-half hour discussion, a statement from the White House announced the US will leave tariffs on $200 billion (£157bn) worth of Chinese imports at 10% at the beginning of the new year, agreeing not to raise them to 25% “at this time”.
In return, “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”, the statement read.
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Calling the extended meeting “friendly and candid,” Foreign Minister Wang Yi said the two leaders had agreed to open their markets to each other and to step up negotiations toward elimination of all additional tariffs.
A Chinese state media report said that the meeting had reached “an important consensus,” pointing out “the direction for Sino-US relations in the near future”.
Reuters reports that the two leaders “also agreed to immediately start talks on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture”.
With the United States and China clashing over commerce, financial markets will take their lead from the results of the talks, “widely seen as the most important meeting of US and Chinese leaders in years”, says the news agency.
True to form, Trump hailed the agreement as “one of the largest deals ever made”, adding “it will have an incredibly positive impact on farming, meaning agriculture, industrial products, computers, every type of product”.
The BBC’s Stephen McDonell reports that China “has pretty much given up nothing in this deal because the future tariffs threatened from the Beijing side were retaliatory in nature and only to be applied if the United State escalated. For this it has gained a 90-day reprieve, during which time both sides have pledged to ramp up talks”.
“This is not a suspension of the trade war but a suspension of the escalation of the trade war”, he writes and “big questions remain about the preparedness of Beijing to allow international access to this enormous market to a level that would satisfy the Trump administration prompting a complete halt in the trade war”.
