Economy

Trump announces Chinese rollback of auto tariffs

Trump announces Chinese rollback of auto tariffs

Trump said he and Xi "are the only two people that can bring about massive and very positive change, on trade and far beyond, between our two great Nations". He did not offer any details.

While Mnuchin said the president reserves the right to escalate tariffs should negotiations not pan out as planned, he cast the weekend's talks as a breakthrough in the administration's efforts to check China and said the discussion included everything from purchasing more United States goods to intellectual property, to currency manipulation. Lamar Alexander today expresses his thoughts on the agreement between President Trump and President Xi of China to control synthetic opioids.

Mr. Trump has weathered fierce criticism of his use of tariffs to force China to deal, including from the Business Roundtable. His reflections on the meeting suggest that, at least at the leaders' level, the US-China relationship is in a better place than it was in October, following U.S. Vice President Mike Pence's speech criticising a wide array of Chinese actions.

Even so, the Buenos Aires breakthrough may calm investors who anxious about financial damage from the trade hostilities. In this case, the threat of future tariffs and potential increased restriction of exports and technology to China should continue to weigh on investment and sentiment in both countries. If he can't get a deal with Xi, he's poised to more than double most of those tariffs January 1.

Shares in Hong Kong also jumped, with the Hang Seng index adding 2.7 percent and the China Enterprises Index jumping 2.8 percent.

The two heads of state had an in-depth exchange of views on China-U.S. relations and global issues of common concern in a friendly and candid atmosphere at a working dinner after the conclusion of the 13th summit of the Group of 20 in Argentina. The G20 agreed to reform the World Trade Organization, which is accused by Trump of limiting USA commercial freedoms to the advantage of China and other rivals.

The very omission of the timeline in the Chinese statements and the short time frame of 90 days remains the two major sources of concern.

However, analysts were much more cautious, saying it seemed unlikely a deal could be reached on such a rapid timeline, and pointing to discrepancies in the claims of victory from Washington and Beijing. Whether such a cease-fire would be enough to get Trump to delay higher or expanded tariffs is unclear.

Growing concerns that the trade war will increasingly hurt corporate earnings and the US economy are a key reason why USA stock prices have been sinking this fall. It was last down 0.07 percent at 96.630.

Xi Jinping
Xi Jinping

Trump, CGTN noted, expressed enthusiasm at the start of the meeting that they would achieve "something great" on trade for both countries.

Trump met Friday with Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi in a rare trilateral meeting.

Can Trump and Xi's newfound friendship usher in a more peaceful period between Beijing and Washington?

Prospects in Congress for the new deal - the U.S. -Mexico-Canada Trade Agreement - were complicated by the midterm elections, which left opposition Democrats in control of the U.S. House.

German Chancellor Angela Merkel, also attending the G20, spoke for many when she urged progress.

"The Chinese public needs to keep in mind that China-US trade negotiations [will] fluctuate". Trump, meanwhile, paints himself as a master deal-maker, so it is also to be expected that he would try to portray the truce as more historic than it actually is.

Now a lasting peace is likely to require the Chinese to scale back their ambitions to become a technological power.

Trump, who was supposed to remain on stage for the group photo with the G20 leaders, shook hands with his Argentine counterpart Mauricio Macri and walked off the stage on Saturday, leaving him alone.

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