Published: Wed, December 05, 2018
Global News | By Blake Casey

Trump Touts Benefits of China Trade Truce for U.S. Farmers

Trump Touts Benefits of China Trade Truce for U.S. Farmers

For its part, China has responded with tariffs ranging between five and 25 percent on US$110 billion worth of United States goods.

Earlier this year, China's tariff's on US imported automobiles stood at 15 percent from 25 percent, Politico reported.

China has agreed to scale back tariffs on imported USA cars, President Donald Trump said Sunday, one day after agreeing with Xi Jinping to a ceasefire in the trade war between the world's top two economies.

Those are "central to Xi's core agenda of making China an innovation superpower" and linked to "geopolitical competition" with Washington, said Michael Hirson, Jeffrey Wright and Paul Triolo of Eurasia Group in a report.

The two leaders, who were in Buenos Aires for a summit of the G20 countries, called it "a highly successful meeting", a White House statement said.

Specifically, China highlighted that the two leaders plan to visit each other's countries at some point and that both sides would work toward scrapping all tariffs to reach a mutually beneficial, win-win agreement.

Both sides gained from hitting the pause button, with Trump securing a Chinese pledge to import more United States goods and Xi staving off the further pressure that higher tariffs would place on his country's slowing economy.

By agreeing to a 90-day ceasefire and freezing new White House-planned tariffs to allow for a series of talks to take place on a range of key issues, the early foundations of a deal have been laid. Trump and Xi have agreed to avoid further escalation, but there is nothing in the read-outs provided by each nation that indicates a move towards reducing the current tariffs that have caused significant economic pain by raising prices for American manufacturers and by reducing American markets for Chinese exporters.

Still, analysts cautioned the deal may have only bought some time for more wrangling over deeply divisive trade and policy differences, and said China's economy will continue to cool regardless under the weight of weakening domestic demand.

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Investors have been eager for signs of a progress toward keeping an already costly trade dispute from spiraling into a new and broader cold war.

Speaking to reporters aboard Air Force One on Saturday, Trump said, "It's an incredible deal". He had previously warned he would do so on January 1, 2019; instead, he will not make any changes for 90 days, in the hopes that a more lasting agreement can be reached, according to the White House statement. China gets a delay on additional tariffs, while the USA gets greater purchases of agriculture goods while retaining leverage to push for more structural changes to the economy.

Buy more USA exports?

The Trump administration also said China would 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".

And while it may have been tacked on to the end of two days of G20 diplomacy, it was in many ways the main event of the weekend.

Mr Trump has been willing to declare victory with only modest concessions in the past, pointing to new trade deals with South Korea, Canada and Mexico, he added. "It is my great honour to be working with President Xi".

The Republican president called their agreement - which Washington hopes will help close a yawning trade gap with the Asian giant and help protect U.S. intellectual property - an "incredible" deal.

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

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