China Trade War Comes to a Temporary Halt

Alicia Cross
December 6, 2018

The White House made it clear that the 10 percent tariffs would still leap up to 25 percent if China doesn't meet U.S. demands in 90 days. A temporary truce rather than an agreement was reached between the two, where both sides would negotiate over trade and China's alleged malpractices in forced technology transfer.

'The two presidents agreed that the two sides can and must get bilateral relations right, ' Wang told reporters, adding they agreed to further exchanges at appropriate times. "It is my great honour to be working with President Xi".

"While I feel strongly that increased tariffs would have a negative impact and do not agree with the administration's tactics, I do feel that fair and balanced trade between the USA and China needed to be addressed".

Since July, the USA has imposed tariffs on $250bn (£195.9bn) worth of Chinese goods. China responded with retaliatory tariffs in the amount of 60 billion dollars.

What was agreed at the G20? .

Under the agreement, Trump is shelving a plan to raise existing tariffs of 10 percent to 25 percent from the start of next year. Kudlow initially said that the Chinese had 90 days from January 1 to come up with "structural changes" regarding intellectual property protections, forced technology transfer and other issues.

Xi has also agreed to purchase "a very substantial amount" of American goods, including agricultural, energy, industrial, and other products, in an effort to reduce the US trade deficit with China.

Mr Trump later wrote on Twitter that China would "reduce and remove" tariffs on US-made cars, which had been raised to 40% over the summer as tensions escalated. Chinese regulators in July blocked Qualcomm's $44 billion takeover bid for its Netherlands-based rival, NXP Semiconductors NV.

That's probably the best takeaway from the trade agreement between the United States and China that was announced Saturday at the G20 conference in Buenos Aires. Some critics of his policy have said that raising tariffs on Chinese goods is likely to increase prices for voters.

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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.

"It is hoped that the trade teams from both countries will reach as many practical agreements as possible and as quickly as possible to hasten China-US cooperation", the daily said.

The question now is what occurs in the next 90 days.

Xi and leaders from the BRICS group of leading emerging economies - Brazil, Russia, India, China and South Africa - called in a statement on Friday for open global trade and a strengthening of the World Trade Organization (WTO).

What pushed the two sides to the table?

By midyear, soybean exports to China were down by 20.5%, according to CNBC.

Will this resolve the dispute?

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However, concerns remain over the differences between the official statements released by the two countries.

"There should be no wishful thinking that the truce would end the trade war between the world's two largest economies", DBS strategist Philip Wee wrote in a research note.

Other reports by Free-Prsite

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