US, China agree not to raise tariffs on Chinese goods

US, China agree not to raise tariffs on Chinese goods

US, China agree not to raise tariffs on Chinese goods

After their hotly anticipated dinner meeting in Buenos Aires, Argentina, on the sidelines of this year's G20 leaders' summit, U.S. President Donald Trump and his Chinese counterpart Xi Jinping found the necessary ingredients for what amounts to a temporary truce. Trump agreed to delay implementing a 25 percent tariff on Chinese goods - including at least $1 billion in bike-related products - that had been set to take effect January 1.

Mr Trump later wrote on Twitter that China would "reduce and remove" tariffs on US-made cars, which had been raised to 40% over the summer as tensions escalated. "The existing tariffs are still having a negative impact on the Chinese economy, they haven't gone away". China also said its regulators would designate fentanyl as a controlled substance, which will help with America's ongoing opioid crisis.

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 U.S. and Chinese leaders in years. Had a deal not been struck, tariffs on US$200bn worth of Chinese goods would have risen from 10% to 25% at the start of 2019.

The United States has slapped steep tariffs on Chinese goods valued at $250 billion since the beginning of July, while China has retaliated with reciprocal tariffs on $110 billion worth of USA goods.

The White House later corrected him to say that the 90 days actually began on Dec 1, Saturday.

In exchange, the two countries agreed to re-start talks on the United States concerns that triggered the dispute, including "forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft", according to the White House.

According to the US President, his relationship with Xi is "very special".

The meeting has offered another chance for Trump to get in the room with Xi.




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. "What I'd be doing is holding back on tariffs".

He said for the first time there was "a clear path" to reduce the U.S. trade deficit with China to zero. However, the losers of the 10% trade tariff imposed on Chinese goods are American farmers who have been hurt by reduced Chinese imports of soybeans and other products.

Announcing USMCA in October, Trump called it "the most important trade deal we've ever made by far".

"The negotiation is likely to remain challenging given the competition in a number of areas, especially technological development", Hui said, adding that "90 days is not very long to resolve these differences".

Xi and leaders from the BRICS group of leading emerging economies - Brazil, Russia, India, China and South Africa - called in a statement on Friday for open worldwide trade and a strengthening of the World Trade Organization (WTO).

President Trump stated: "This was an incredible and productive meeting with unlimited possibilities for both the United States and China".

Beijing will no doubt attempt to make good on its pledge to increase purchases of US goods, turning probably to soybeans and potentially energy. I think we'd like to.

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