United States and China in trade tariffs truce after tense G20 summit

G20 declaration stresses fair sustainable development

G20 declaration stresses fair sustainable development

President Trump is meeting with Chinese President Xi Jinping at the G-20 summit in Argentina Saturday afternoon, amid an escalating trade war between the US and China.

Donald Trump is to meet China's President Xi Jinping after the G20 summit in their first talks since a trade war erupted earlier this year.

In exchange, China agreed it was willing to purchase a "very substantial" amount of agriculture, energy and other goods from the United States to help reduce the trade imbalance.

Following more than two hours of dinner talks between the two leaders, the White House said an increase of tariffs from 10 to 25 per cent due to kick in on Jan 1 would now be put on hold, providing room for intense negotiations.

"It's great the two sides took advantage of this opportunity to call a truce", said Andy Rothman, investment strategist at Matthews Asia.

"Both parties agree that they will endeavour to have this transaction completed within the next 90 days".

Xi expressed openness to approving a previously unapproved Qualcomm-NXP deal, should it be presented to him again, it said.

Trump slapped 10 percent tariffs on $200bn in Chinese goods in September.

At Trump's request, China agreed to label fentanyl a controlled substance due to its contribution to the U.S. opioid crisis.

President Donald Trump and the leaders of Canada and Mexico signed the U.S. -Mexico-Canada Agreement - a replacement to NAFTA - Friday at the G-20 summit in Argentina.

President Trump and the other leaders of the Group of 20 agreed Saturday to a joint statement that included support for trade reforms, which was a chief USA objective for the summit.

And that is important for President Trump as Chinese tariffs were affecting his power base, the rural heartlands of the Midwest which export commodities like soya beans and sorghum to China.

Paul Ashworth, chief USA economist at Capital Economics, notes that if talks fail, tariffs would rise on the $200 billion of goods already on the receiving end, and would be imposed on the remaining $250 billion that are, so far, penalty-free.

Speaking to reporters on Air Force One, Trump hailed his agreement with Xi.

But a summit-ending statement from the G20 reiterated that the United States has rejected a global agreement on climate change, and omitted pledges to combat protectionism that were a mainstay of the world's leading economies in the pre-Trump era.

The White House said Xi, "in a wonderful humanitarian gesture", had agreed to designate fentanyl a controlled substance.

At the summit, the G20 is also expected to have discussed how to deal with China's so-called debt trap, in which countries receiving massive loans from China end up giving up control of key infrastructure after the debts become unpayable.

Earlier in the day, Trump canceled a planned news conference, saying the timing was not right because of the death of former U.S. President George H.W. Bush at the age of 94.

Trump also told reporters that he thinks there could be a meeting with North Korean leader Kim Jong Un in January or February next year. "The two sides made a decision to avoid escalation of trade restrictive measures and will work towards lifting all additionally-imposed tariffs", Xinhua said. China also agreed to boost its purchases of agricultural and industrial goods to reduce its trade imbalance with the USA, she said. Most of the US supply of the drug is made in China.

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