Published: Mon, December 03, 2018
Money | By Bruce West

The Trump trade war will drift into 2019

The Trump trade war will drift into 2019

Trump will leave tariffs on $200 billion worth of Chinese imports at 10 percent at the beginning of the new year, agreeing to not raise them to 25 percent "at this time", the White House said in a statement.

Trump has also threatened to put tariffs on another $267 billion worth of Chinese imports, as the relationship appeared set to worsen in the weeks ahead of the Argentina meeting.

After signing a revamped trade pact Friday with Mexico and Canada on better terms for the United States, Trump agreed with Xi on Saturday to work to resolve issues such as forced technology transfer and intellectual property protection in exchange for suspending new USA tariffs on Chinese imports for 90 days.

The statement also noted that China would purchase a "not yet agreed upon, but very substantial" amount of agricultural, energy, industrial and other products.

He wants to address alleged Chinese theft of intellectual property, forced technology transfers, ownership of American companies in China, and tariffs and non-tariff barriers, among other issues.

"Both parties agree that they will endeavour to have this transaction completed within the next 90 days". Xi and Trump agreed to "have further exchange of visits at an appropriate time", Wang said.

Trump has long railed against China's trade surplus with the United States and Washington accuses Beijing of not playing fairly on trade.

In July, Qualcomm - the world's biggest smartphone-chip maker - walked away from a $44 billion deal to buy NXP after failing to secure Chinese regulatory approval, becoming a high-profile victim of the China-U.S. trade dispute.

China has targeted $110 billion worth of U.S. imports for tariffs.

During their two-and-half hour dinner meeting, the two leaders had constructive and positive discussions on the economic and trade issues. That will resonate on the markets when trading in "black gold" resumes on Monday, as will the ceasefire to Trump's trade war with China. The results of the meeting may ultimately resolve differences and lower tariffs that affect more than half of all trade between the United States and China.

After the meeting, Kudlow said the talks went "very well". China responded by imposing its own round of tariffs.

"Cooperation is the best option for the two countries" in promoting world peace and prosperity, Xi reportedly told the U.S. president at a working dinner, according to Xinhua.

President Trump stated: "This was an awesome and productive meeting with unlimited possibilities for both the United States and China".

Trump may come under pressure once scrutiny of the cease-fire reveals that Xi got off "without yielding any meaningful concessions", said Brock Silvers, managing director of Shanghai-based investment advisory Kaiyuan Capital. "China relations that both sides claim victory", said Michael Pillsbury, a senior fellow at the Hudson Institute and a defense official under presidents including Ronald Reagan and George W. Bush.

China is "the largest source of illicit fentanyl and fentanyl-like substances in the United States", according to a US commission established by Congress to review the national security implications of relations between the two countries.

Playing down domestic concerns of any compromise by China giving in to Trump's demands, it said "the Chinese public needs to keep in mind that China-US trade negotiations fluctuate".

Putin said it was "a pity" that he had not been able to have a proper meeting with Trump at the G20.

In May, Treasury Secretary Steven Mnuchin declared the trade war "on hold" after Beijing agreed to increase its purchases of U.S. soybeans and liquefied natural gas - a move that could have put a dent in China's massive trade surplus with the United States.

"President Trump's agreement yesterday with President Xi of China is the single most important step that could be taken to stop the flow of deadly fentanyl, a synthetic opioid, from China into the United States".

"For the first time ever, the G-20 recognized the WTO is now falling short of meeting its objectives and that it's in need of reform", a USA official, speaking on condition of not being named, told reporters.

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