Published: Mon, December 03, 2018
Worldwide | By Myra Stephens

Trump, Xi agree to temporary truce on trade

Trump, Xi agree to temporary truce on trade

Widely read Chinese tabloid the Global Times, published by the ruling Communist Party's official People's Daily, warned people had to have realistic expectations.

"China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries". In a briefing in Beijing a few hours later, China's foreign ministry spokesman Xi Jinping declined to comment on any vehicle tariff changes.

"Still, one must presume that as the existing and proposed tariffs are to spur China to address the US' IPR concerns, only action directly related to that would ultimately impact the 301 tariffs", he said.

The healthy increases paved the way for sharp rises on European and U.S. exchanges later on Monday with futures trade seeing the FTSE100 opening up by 1.6% and the Dow Jones industrial average on Wall Street expected to leap 2%.

There was no sign, however, of progress in their core dispute: American pressure on Beijing to roll back industry plans that Washington says are based on theft and violate Chinese market-opening obligations. But it later added a 25 percent tariff on USA made cars as trade tensions soared, bringing them to 40 percent. "Discussion on economic and trade issues was very positive and constructive".

The news comes as Trump mulls a tariff hike on vehicles imported from the European Union.

Trump's G20 summit was overshadowed by his abrupt decision to cancel a meeting with Russian President Vladimir Putin. In its turn, Beijing responded with tariffs on $110 billion of USA goods.

Prior to having dinner with Trump, Xi said he was "very happy" to have an opportunity to address issues with the United States leader.

It is linked to "intense geopolitical competition" with Washington.

By agreeing to a 90-day ceasefire and freezing new White House-planned tariffs to allow for a series of talks to take place on a range of key issues, the early foundations of a deal have been laid.

China reaffirmed that the agreement held "great significance".

Amid the trade tensions, China has sharply curtailed its purchases of USA soybeans and other produce, dealing a significant blow to farmers, a major support base for Trump. But they have been overshadowed by the tariff battle.

China responded by imposing its own tariffs.

Threats of additional U.S. penalties loom in the background.

The United States has imposed 25 percent tariffs on another $50 billion worth of Chinese imports and they remain in effect despite the truce.

President Trump teased automakers in the USA and worldwide late Sunday with a characteristically minimalist announcement of China's apparent intention to ease its 40 percent import tariffs on US -made cars.

Trump agreed to hold off for the time being on any new tariffs, while his Chinese counterpart pledged to purchase more American goods. USA officials for years have been pressing the Chinese government to take a tougher stance against fentanyl, and most US supply of the drug is manufactured in China.

Foreign carmakers have long pleaded for freer access to China's auto market, while its own manufacturers are trying to expand overseas.

Chinese shares, commodities and the yuan currency surged even as uncertainly remains about the deal. This goes unmentioned in the Chinese Foreign Ministry statement.

Trump had previously said that 142 concessions offered by China were "not acceptable".

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