The two-and-a-half-hour dinner shared by Xi Jinping and Donald Trump in Argentina, where they repeatedly emphasized their great friendship, has ended with an apparent ‘trade truce’.
The leaders have reached a consensus that trade talks should continue and have agreed not to impose any additional tariffs, at least for now.
“President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time,» the White House said in a statement.
For its part, Beijing has consented to purchase a “very substantial amount” of American agricultural, energy and industrial products, to reduce the trade imbalance between the two countries, which amounted to $375 billion last year. While the list of American items to be purchased by Beijing has yet to be finalized, China agreed to start purchasing “agricultural product from our farmers immediately,” the US administration claimed.
On top of this, Trump and Xi reached an understanding to “immediately” start negotiations on “structural changes” with regard to cyber protection and technology transfer, as well as intellectual property rights and non-tariff barriers.
Yet, if China fails to address those issues within 90 days, Washington will go ahead with raising the 10 percent tariff rate, currently in place on some $200 billion of US goods, to 25 percent.
This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi.
“Cooperation is the best option for the two countries” in promoting world peace and prosperity, Xi reportedly told the US president at a working dinner, according to Xinhua. The Chinese leader said his country would like to proceed to exchange views on issues of common concern to jointly work out a course in bilateral relations in the next stage.
Prior to having dinner with Trump, Xi said he was “very happy” to have an opportunity to address issues with the US leader. Once again highlighting the “very special” relationship between the leaders, Trump expressed hope that they can reach an understanding that “will be good” for both nations.
Beijing and Washington are currently locked in a trade war, after Trump began imposing tariffs on Chinese goods for violating intellectual property rights, also accusing the Asian nation of unfair trade practices amounting to a $375 billion US trade deficit with China.
The US, which has already slapped tariffs on $250 billion of Chinese products, has also threatened Beijing with an additional $267 billion in levies unless China shows a willingness to close the massive trade deficit. In its turn, Beijing responded with tariffs on $110 billion of US goods.
A thaw in tense bilateral relations was made possible following a “wonderful humanitarian gesture” by the Chinese leader to solve the “tremendous fentanyl problem” the US has experienced from the synthetic drug on the American market. The leaders have agreed that, from now on, anyone selling the controlled substance from China to the US will be “subject to China’s maximum penalty under the law.”