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Date TimeDecember 02, 2018
VoiceThe United States has agreed to delay a planned Jan. 1 tariff increase to allow the two powers to iron out their trade differences.
U.S. President Donald Trump and Chinese leader Xi Jinping have pressed pause on the months-long escalation of their ongoing trade dispute. The White House announced the cease-fire following a two-hour dinner meeting on Saturday between Trump and Xi, held on the sidelines at the G20 summit in Argentina.
The U.S. has agreed to delay by 90 days a planned increase in tariffs on $200 billion of Chinese imports so the two nations have time to iron out their trade differences — or at least attempt to do so, the White House said.
Trump has already imposed import taxes on $250 billion in Chinese products — 25 percent on $50 billion worth and 10 percent on the remaining $200 billion. He’d threatened, however, to raise the tariffs on the $200 billion to 25 percent, starting Jan. 1.
White House Press Secretary Sarah Sanders said Trump and Xi had agreed to begin immediate trade negotiations on the stickier points of contention between the two powers, including forced technology transfer and intellectual property protection. The planned tariff increase would be paused in the meantime, but she stressed the tariffs will be raised to 25 percent at the end of 90 days if “the parties are unable to reach an agreement.”
Sanders added that China had agreed to make several concessions as part of the trade detente, including a promise to buy a “not yet agreed upon, but very substantial” amount of agricultural, industrial and other products from the U.S.
China also agreed to reconsider approval of U.S. chipmaker Qualcomm’s takeover of Netherlands-based rival NXP — a deal the Chinese government blocked earlier this year ― and to label the synthetic opioid fentanyl a controlled substance, a move the U.S. has been pushing China to do for years. According to an earlier Bloomberg report, most fentanyl found in the U.S. is manufactured in China.
Trump described the meeting with Xi as “amazing and productive.”
“It’s an incredible deal,” the president said aboard Air Force One, according to AP. “What I’ll be doing is holding back on tariffs. China will be opening up, China will be getting rid of tariffs. China will be buying massive amounts of products from us.”
Chinese officials also reacted positively to the talks. Wang Yi, China’s top diplomat, told reporters that the negotiations had been conducted in a “friendly and candid atmosphere.”
“The two presidents agreed that the two sides can and must get bilateral relations right,” Wang said, per Reuters. “Discussion on economic and trade issues was very positive and constructive. The two heads of state reached consensus to halt the mutual increase of new tariffs.”
Experts have noted that the trade truce does not mark an end to the trade dispute between the two nations but rather a suspension of its escalation. Still, concerns about the potential global damage that further tariff increases could wreak will be ― at least temporarily ― assuaged.
“It’s great the two sides took advantage of this opportunity to call a truce,” Andy Rothman, an investment strategist at Matthews Asia who specializes in China, told AP. “The two sides appear to have had a major change of heart to move away from confrontation toward engagement. This changes the tone and direction of the bilateral conversation.”

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