US, China trade war sees a pause

  • US, China trade war sees a pause

US, China trade war sees a pause

Forged over grilled sirloin at the Group of 20 summit Saturday in Buenos Aires, Argentina, the ceasefire Trump and Xi agreed to Saturday night illustrated that the leaders of the world's two largest economies can at least find some common ground, however tentative and ill-defined it might be.

Mnuchin, in an interview with CNBC on Monday, put a US$1.2 trillion price tag on China's additional trade commitments, but emphasized the details of how they get there still need to be negotiated.

China had previously offered to increase its purchases of USA products, only to have Mr Trump reject the deal.

The increases come after the United States and China said they had agreed to not increase tariffs for 90 days to allow for talks. He made this pronouncement despite in October withdrawing the U.S.

Yet reaching a permanent peace will hardly be easy.

10 percent tariffs on US$200 billion worth of goods, effective September 24, 2018. However, if this does not happen, the 10 percent tariffs will be raised to 25 percent.

In Buenos Aires, they did reach such an accord.

Trump last week ordered a separate review of China's 40 per cent tariff on auto imports from the USA, 25 percentage points of which is the result of Chinese retaliation against Trump's own tariffs on imports from China.

During the meeting in Buenos Aires, the U.S. agreed not to increase tariffs on January 1, as had been planned, while China agreed to immediately buy more agricultural products from USA farmers.

The US and China have been embroiled in a trade war this year which has seen the US hit China with tariffs on $250bn (£195.9bn) worth of goods since July, and China retaliate with duties on some $110bn of US goods over the same period.

The results of the most recent meeting between US President Donald Trump and his Chinese counterpart Xi Jinping allow to delay possible further escalation of a trade war between the two countries and to find a long-term solution for better bilateral relations, vice president of China operations at the US-China Business Council, Jacob Parker said. China's commerce and finance ministries did not respond to requests for comment yesterday.

But can China be trusted?

China and the United States will work towards improving their relationship in the coming weeks.

While Trump cited the US trade deficits with foreign nations as a reason for implementing the tariffs, the USA trade deficit with China has increased since the tariffs were announced.

America and China have been in economic combat for months. "Level the field!" Trump said.

That's because for China, Trump's trade war has never been only - or even mainly - about trade.

He said for the first time there was "a clear path" to reduce the U.S. trade deficit with China to zero.

U.S. indexes rose about 1% on Monday, following gains in Europe and Asia.

In the meantime, just as Trump dialed back the drama on one trade front over the weekend, he magnified the tension on another. Such a move would force lawmakers to approve the NAFTA replacement he reached September 30 with Canada and Mexico - or have no North American trade bloc at all.

Treasury Secretary Steven Mnuchin said on CNBC the United States and Chinese had "very specific discussions" in Buenos Aires Saturday evening on steps to defuse their conflict, which involves hundreds of billions in bilateral trade and had roiled world markets for months.