US China Trade Truce at G20 Summit, 90-Day Ceasefire Announced

USA and China stopped their war for three months

USA and China stopped their war for three months

BUENOS AIRES, Argentina-President Trump and Chinese President Xi Jinping pledged to halt the imposition of new tariffs for 90 days as the world's two largest economies negotiate a lasting agreement.

The truce, agreed on Friday (30 November) by United States president Donald Trump and China's president Xi Jinping, has been welcomed by U.S. associations representing apparel and footwear brands and retailers.

China has agreed to reduce and remove tariffs on cars coming into China from the U.S. now the tariff is 40%.

"I do not think market consensus is looking for very significant progress, this is a temporary truce", Masamichi Adachi senior economist at JP Morgan in Japan said.

But the White House also said the existing 10% tariffs on $200bn worth of Chinese goods would be lifted to 25% if no deal was reached within 90 days, once again setting the clock ticking for a potential standoff at the end of March 2019. But it added a 25 percent tariff on U.S. cars as trade tensions soared, bringing them to 40 percent.

In a Tweet on Sunday night, Trump said: "China has agreed to reduce and remove tariffs on cars coming into China from the U.S. now the tariff is 40%".

During the meeting in Buenos Aires, the U.S. agreed not to increase tariffs on January 1, as had been planned, while China agreed to immediately buy more agricultural products from USA farmers.

Left out of Chinese media statements is the US claim that a tariff deal is conditioned on the two countries resolving key issues within 90 days.

Trump appeared to be unaware of the significance of his words on Monday, tweeting: 'My meeting in Argentina with President Xi of China was an extraordinary one.

China had previously offered to increase its purchases of USA products, only to have Mr Trump reject the deal. They intend to start purchasing agricultural products immediately.

Despite the questions, US President Donald Trump was in an ebullient mood, promising benefits to US farmers and vehicle companies.

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"It's 90 days. It's nothing and it doesn't really make any difference".

The increases come after the USA and China said they had agreed to not increase tariffs for 90 days to allow for talks.

The U.S. imposes a 27.5-percent tax on imported cars and light trucks from China.

In his Twitter roundup of weekend doings, Trump talked of halting the arms race.

US stock indexes also opened sharply higher in NY at the start of a new work week, with the widely watched Dow Jones Industrial Average of 30 key stocks ahead more than 1.5 percent.

Prospects in Congress for the new deal - the U.S. -Mexico-Canada Trade Agreement - were complicated by the midterm elections, which left opposition Democrats in control of the U.S. House. However, if this does not happen, the 10 percent tariffs will be raised to 25 percent.

The truce pulled the United States and China back from an escalating trade war that was threatening world economic growth and had set global investors on edge.

Of China's US$51 billion of vehicle imports in 2017, about US$13.5 billion came from North America, including sales of models made there by non-U.S. manufacturers like BMW.

Major US automakers said they were unaware of the lower tariffs on exports to China. "I don't agree with that", he said.

Farmers sold $19.6 billion in products to China a year ago, according to the Farm Credit Administration Office of Regulatory Policy. "That appears to have been a key consideration for Trump, who became more open to a deal as USA stock markets weakened in October and November".

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