US President, Donald Trump, and Chinese counterpart, Xi Jinping, have agreed a temporary truce on their ongoing trade war.
The two leaders had dinner together at the annual G20 summit in Argentina last week, agreeing a 90-day delay on tax increases in the hope that a more lasting deal could be negotiated in that time.
As part of the deal, Trump agreed to delay implementing a 25% tariff on Chinese goods which was planned to take effect 1 January next year. The 10% tariff placed on goods back in September will remain as it is for at least 90 days from 1 December.
The White House released this statement concerning the agreement: “On Trade, 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. 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. China has agreed to start purchasing agricultural product from our farmers immediately.
“President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavour to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.”
However, it still remains uncertain whether a deal will be struck between the two countries at all. Yesterday morning, Trump announced that he had persuaded the Chinese president to reduce the 40% tariff on US car imports, however Beijing refused to confirm this claim. It seems that negotiations between the two countries will be anything but straightforward, with both sides set to intensify talks over the coming weeks.
Following the truce between Trump and Xi Jinping in Buenos Aires, the two countries have a 90-day period to find a lasting solution their disagreements.