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Truce in Trade War After Trump-Xi Dinner in Argentina

December 2, 2018 by  

The world’s two largest economies, the U.S. and China, have agreed to a small truce in their escalating trade war after a meeting between presidents Donald Trump and Xi Jinping following the G-20 summit. Trump, speaking to reporters on Air Force One after the plane departed Argentina, said his agreement made over dinner with Xi, will go down “as one of the largest deals ever made. … And it’ll have an incredibly positive impact on farming, meaning agriculture, industrial products, computers — every type of product.” Trump agreed that he will leave the tariffs on $200 billion worth of Chinese products at the 10 percent rate, and not raise it to 25 percent, for now, as he has threatened to do come Jan. 1, according to a White House statement.

“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,” said White House Press Secretary Sarah Sanders. “China has agreed to start purchasing agricultural product from our farmers immediately.”

Trump and Xi also “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, according to the White House statement. “Both parties agree that they will endeavor 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 percent tariffs will be raised to 25 percent.”

Some of the details were echoed by Chinese Foreign Minister Wang Yi, who confirmed that both countries will step up negotiations.

The news is likely to bring cheer Monday to global financial markets, which have been sensitive to the escalating trade battles between China and the United States.

Fentanyl designation

At the dinner, Xi also agreed to designate fentanyl as a controlled substance, meaning that people selling the powerful opioid to the United States will be subject to China’s maximum penalty under the law.

​The White House is calling the Chinese president’s decision a “wonderful humanitarian gesture.”

Trump, sitting across from Xi at a long banquet table, described their relationship as “incredible” and predicted that would mean “we’ll probably end up getting something that’s good for China and good for the United States.”

In his remarks, the Chinese president noted, “it’s been a long time since our previous meeting and a lot of things have taken place.”

Xi added, “Only with cooperation between us can we serve the interest of world peace and prosperity.”

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