President Trump and Chinese leader Xi Jinping reached an agreement on trade Saturday night, the White House press secretary said, that amounts to a temporary stand-down in the two countries’ trade war.
At the leaders’ highly anticipated dinner summit in Buenos Aires, Trump agreed to hold off on raising tariffs imposed on Chinese imports, and China agreed to purchase an as-yet-unspecified “very substantial” amount of U.S. products to reduce the trade deficit. With those concessions made, the two sides will allow 90 days for broader negotiations over Chinese trade practices before the U.S. resumes ramping up retaliatory measures.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said in a statement provided by the White House. “It is my great honor to be working with President Xi.”
The immediate effect of the preliminary deal will be a temporary reprieve for China on tariffs on $200 billion worth of goods, which were set to rise to 25 percent by Jan. 1, but now will stay at 10 percent.
Also, China agreed to stiffen penalties on sales of the powerful opioid fentanyl into the U.S., a step the White House press secretary described as “a wonderful humanitarian gesture.” Additionally, the White House said that Xi would consider approving the previously unapproved merger between the U.S. company Qualcomm and NXP Semiconductors.
“Based on information I received, talks between Xi and Trump went well and consensus was reached,” tweeted Hu Xijin, the editor of the Global Times, an official Chinese Communist Party publication.
The issues to be discussed in the 90-day timeframe are daunting: China’s forced technology transfers, intellectual property theft, non-tariff trade barriers, and cyberattacks, according to the White House.
The temporary truce, reached over a two-plus-hour dinner of steak and caramel pancakes, represents a rare moment of harmony between the two sides, whose ongoing trade battle has escalated in recent weeks leading into the meeting at the G-20 summit in Argentina. On Monday, Trump warned that he might go ahead with tariffs on an additional $267 billion in Chinese products if no progress was made at the Argentina summit.
Earlier on Saturday, the White House said it would hold off on a formal press conference regarding the G-20 until after President George H.W. Bush’s funeral.
The world leaders at the G-20 event issued a joint statement calling for reforms to the World Trade Organization. The final version of the statement did not include language opposing trade protectionism, a win for the Trump administration, which had fought to exclude any mention of it.