US President Donald Trump, the self-proclaimed ‘master of the deal’ lived up to that title over the weekend.
Having demonstrated he was serious and able to impose damaging tariffs on all Chinese exports into the US over the course of 2018, the Chinese finally blinked.
Trump and top US officials say a new trade truce with China will bring structural changes to Beijing’s economic policies, to lower tariffs, lower non-tariff barriers and open the market for US companies.
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Trump and Xi declared a truce
On Saturday, Trump and Chinese President Xi Jinping declared a truce amid months of boiling trade tensions, agreeing to hold off on new tariffs while sitting down for a meal together in Argentina.
In a tweet, Trump on Sunday said china had agreed to cut import levies on American made cars, as reported by RAW.
And on Monday, Trump tweeted:
‘My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen’.
Chinese regulators didn’t respond to calls for comments on Trump’s car tariffs tweet. Both countries failed to mentioned car tariffs in official read-outs of the Trump–Xi meeting.
After the weekend, the US has agreed not to raise tariffs further effective 1 January. China matched the deal, by agreeing to immediately purchase more products from US farmers. This agreement took place over dinner spanning two and half hours.
The ceasefire strengthened global markets
Negotiations will continue over the next 90 days to resolve issues of concern made by the US over intellectual property protection, non-tariff trade barriers and cyber theft, according to RAW.
There was a noticeable difference in discussions at Buenos Aires with Chinese officials according to US Treasury Secretary Steven Mnuchin, as President Xi put forth a clear commitment to open China’s markets to US companies.
‘This is the first time that we have a commitment from them that this will be a real agreement,’ Mnuchin told CNBC television, adding that the administration would know ‘very quickly’ whether a deal can be documented.
‘We absolutely need something concrete over these 90 days,’ Mnuchin added.
‘This is not going to be something where there’s just soft commitments that get kicked down the road.’
The ceasefire strengthened Monday’s global markets with stocks climbing almost 1%. While negotiations with China are set to be driven by an ‘inclusive team’ of administration officials. Trump is at the forefront along with other cabinet officials, as well as himself Mnuchin said.
In a change from past practices, White House trade adviser Peter Navarro said that talks would be led by US Trade Representative Robert Lighthizer, and not Mnuchin, who had a lead role.
The remaining 10% tariffs on US$200 billion (AU$271 billion) worth of Chinese goods would be upped to 25% if no deal is reached within 90 days, in move that is heating the global economy to boiling point.
At Beijing, Chinese Foreign Ministry spokesman Geng Shuang echoed comments made from the government’s top diplomat State Councillor Wang Yi who on Saturday, said the ultimate goal was the lifting of all tariffs, as reported by RAW.
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