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U.S., China agree trade war ceasefire after Trump, Xi summit

Reuters  |  BUENOS AIRES 

By Roberta and Michael Martina

BUENOS AIRES (Reuters) - and the agreed to a ceasefire in their bitter trade war on Saturday after high-stakes talks in between U.S. and Chinese Xi Jinping, including no escalated tariffs on Jan. 1.

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 said in a statement.

"will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the to reduce the trade imbalance between our two countries," it said.

"has agreed to start purchasing from our farmers immediately."

The two leaders also agreed to immediately start talks on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, the said.

Both countries agreed they will try to have this "transaction" completed within the next 90 days, but if this does not happen then the 10 percent tariffs will be raised to 25 percent, it added.

The Chinese government's top diplomat, Wang Yi, said the negotiations were conducted in a "friendly and candid atmosphere".

"The two presidents agreed that the two sides can and must get bilateral relations right," Wang told reporters, adding they agreed to further exchanges at appropriate times.

"Discussion on economic and trade issues was very positive and constructive. The two heads of state reached consensus to halt the mutual increase of new tariffs," Wang said.

"China is willing to increase imports in accordance with the needs of its domestic market and the people's needs, including from the United States, to gradually ease the imbalance in two-way trade."

"The two sides agreed to mutually open their markets, and as China advances a new round of reforms, the United States' legitimate concerns can be progressively resolved."

The two sides would "step up negotiations" toward full elimination of all additional tariffs, Wang said.

The announcements came after Trump and Xi sat down with their aides for a working dinner at the end of a two-day gathering of world leaders in Buenos Aires, their dispute having unnerved global financial markets and weighed on the world economy.

After the 2-1/2 hour meeting, told reporters the talks went "very well," but offered no specifics as he boarded headed home to with Trump.

China's goal was to persuade Trump to abandon plans to raise tariffs on $200 billion of Chinese goods to 25 percent in January, from 10 percent at present. Trump had threatened to do that, and possibly add tariffs on $267 billion of imports, if there was no progress in the talks.

With the and China clashing over commerce, financial markets will take their lead from the results of the talks, widely seen as the most important meeting of U.S. and Chinese leaders in years.

The encounter came shortly after the Group of 20 industrialized nations backed an overhaul of the (WTO), which regulates international trade disputes, marking a victory for Trump, a of the organization.

Trump told Xi at the start of their meeting he hoped they would achieve "something great" on trade for both countries. He struck a positive note as he sat across from Xi, despite the U.S. president's earlier threats to impose new tariffs on Chinese imports as early as the next year.

He suggested that the "incredible relationship" he and Xi had established would be "the very primary reason" they could make progress on trade.

Xi told Trump that only through cooperation could the United States and China serve the interest of peace and prosperity. and have also increasingly been at odds over security in the region.

At the same time, Trump again raised with Xi his concern about the synthetic opioid fentanyl being sent from China to the United States, urging the Chinese to place it in a "restricted category" of drugs that would criminalize it.

The White House said Xi, "in a wonderful humanitarian gesture", had agreed to designate fentanyl a controlled substance.

Xi also said that he was open to approving the previously unapproved Qualcomm-NXP deal should it again be presented to him, the White House added.

"This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with Xi," Trump said in the statement.

WTO REFORMS

Earlier on Saturday, the leaders of the world's top economies called for WTO reform in their final summit statement.

Officials expressed relief that agreement on the communique was reached after negotiators worked through the night to overcome differences over language on climate change.

The final text recognized trade as an important engine of global growth but made only a passing reference to "the current trade issues" after the U.S. delegation won a battle to keep any mention of protectionism out of the statement.

Trump has long railed against China's trade surplus with the United States, and accuses of not playing fairly on trade. China calls the United States protectionist and has resisted what it views as attempts to intimidate it.

The two countries are also at odds over China's extensive claims in the Sea and U.S. warship movements through the highly sensitive

In addition to tariffs on Chinese goods, Trump has imposed tariffs on and aluminum imports into the United States this year. Numerous countries have filed litigation at the WTO to contest the levies.

The United States is unhappy with what it says is the WTO's failure to hold China to account for not opening up its economy as envisioned when China joined the body in 2001. The is also pushing for sweeping changes to how the WTO operates.

delegates said negotiations on the summit statement proceeded more smoothly than at a meeting of leaders two weeks ago, where disagreement on protectionism and unfair trading practices prevented a consensus.

European officials said a reference to refugees and migration - a sensitive issue for - was excised to ensure consensus.

On climate change, the United States once again marked its differences with the rest of the by reiterating in the statement its decision to withdraw from the Agreement and its commitment to using all kinds of sources.

The other members of the group reaffirmed their commitment to implement the deal and tackle climate change.

(IMF) said high levels of debt accumulated by emerging market nations was a pressing concern.

U.S. officials said a call by leaders for the IMF and to improve monitoring debt levels was aimed at ensuring that developing economies did not become to heavily indebted to China in return for infrastructure projects.

U.S. officials have warned about China's increasing influence across swaths of the developing world, including G20 summit host is expected to sign a series of deals with China on Sunday during a one-day state visit by Xi.

Apart from trade and climate change, Russia's seizure of Ukrainian vessels drew condemnation from other G20 members, while the presence of Crown at the summit raised an awkward dilemma for leaders.

Saudi Arabia's de facto ruler arrived amid controversy over the killing of Saudi Jamal Khashoggi, though Saudi officials have said the had no prior knowledge of the murder.

The of the OPEC heavyweight had a series of bilateral meetings at the summit, including a closely watched encounter with Russian President

(Reporting by Roberta Rampton, Michael Martina, Matt Spetalnick, Maximilian Heath, Scott Squires, Cassandra Garrison, and Kylie Maclellan in Buenos Aires; Dave Shepardson and Humeyra Pamuk in Washington, Ben Blanchard in and John Ruwitch in Shanghai; writing by and Daniel Flynn; editing by Ross Colvin, Alistair Bell, and Will Dunham)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 08:53 IST
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