Truce in US-China trade war after Trump-Xi dinner in Argentina.
NEW YORK (Dec 3, 2018) — China has made more than $1.2 trillion in additional trade commitments as part of a deal reached by U.S. President Donald Trump and Chinese President Xi Jinping in Argentina following the G20 Summit.
Xi has vowed to take immediate steps on those promises.
As part of the deal, the United States agreed not to raise tariffs further on Jan. 1, while China agreed to buy more agricultural products from U.S. farmers immediately.
White House Press Secretary Sarah Sanders told reporters, “China has agreed to start purchasing agricultural product from our farmers immediately.”
Trump agreed that he will leave the tariffs on $200 billion worth of Chinese products at the 10 percent rate, and not raise it to 25 percent, for now, as he has threatened to do come Jan. 1, according to a White House statement.
The deal after Trump-Xi dinner has served a small truce in the world’s two largest economies’ escalating trade war.
The truce boosted global markets on Monday with world stocks up nearly 1 percent. On Wall Street, the Dow Jones Industrial Average rose 0.94 percent at the open and the S&P 500 by 1.10 percent.
Trump, speaking to reporters on Air Force One after the plane departed Argentina, said his agreement made over dinner with Xi, will go down “as one of the largest deals ever made. … And it’ll have an incredibly positive impact on farming, meaning agriculture, industrial products, computers — every type of product.”
U.S. officials will monitor Chinese progress on enforcing the commitments very closely, said National Economic Council Director Larry Kudlow to reporters at the White House.
China’s vice premier in Argentina told U.S. Trade Representative Robert Lighthizer over lunch that Beijing would move immediately on the new commitments.
The Trump administration justifies the trade sanctions against China to protect US national security and intellectual property, and to reduce the U.S. trade deficit.
US Treasury Secretary Steve Mnuchin said on Monday there was a clear shift in tone at Buenos Aires from past discussions with Chinese officials, as Xi offered a clear commitment to open China’s markets to U.S. companies.
“They put on the table an offer of over $1.2 trillion in additional commitments. But the details of that still need to be negotiated,” Mnuchin told CNBC. “This is the first time that we have a commitment from them that this will be a real agreement.”
Kudlow said Washington would like to see progress quickly on structural issues, including intellectual property theft and technology transfers. Americans will get majority ownership in companies in China for the first time, which should help address those issues, he said on CNBC.
The two sides also agreed to negotiate over the next 90 days to resolve issues of concern raised by the United States including intellectual property protection, non-tariff trade barriers and cyber theft.
Trump has appointed Lighthizer, one of the administration’s most vocal China critics, to oversee the new round of trade talks with China, a White House official and a U.S. official told Reuters on Monday.
The appointment of Lighthizer may signify a harder line in talks with Beijing and marks a shift from past practices where Mnuchin had a lead role.
Lighthizer is an experienced trade negotiator who just completed a new agreement with Canada and Mexico.
“He’s the toughest negotiator we’ve ever at the USTR and he’s going to go chapter and verse and get tariffs down, non-tariff barriers down and end all these structural practices that prevent market access,” White House trade adviser Peter Navarro told National Public Radio earlier on Monday.
On Sunday, Trump tweeted that China had agreed to cut import levies on American-made cars.
Chinese regulators did not respond to requests for comment on Trump’s tweet on autos tariffs. Neither country had mentioned auto tariffs in their official read-outs of the Trump-Xi meeting.