China trade war begins to thaw as new tariffs halted

Donald Trump hails 'amazing and productive' talks, as US agrees to suspend new China tariffs for 90 days

US and China 'will impose no new tariffs'

"Currently the tariff is 40%". Both parties agreed to complete negotiations within 90 days.

The White House said that China has also agreed to step up purchases "immediately" of an unspecified amount of U.S. agricultural goods.

The White House's official statement says nothing of the sort; it only says the USA will hold negotiations with China on the latter's "forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture".

The truce, reached after a dinner of more than two hours, buys time for the two countries to work out their differences in a dispute over Beijing's aggressive drive to supplant USA technological dominance.

There was no sign, however, of progress in their core dispute: American pressure on Beijing to roll back industry plans that Washington says are based on theft and violate Chinese market-opening obligations.

Any move to reduce or eliminate the extra tariff is a boon for carmakers such as Tesla, BMW and Daimler, which all produce cars in the USA and import to China. "It is my great honour to be working with President Xi". Gold rose. 0.9 percent at $1,233.53 an ounce, reaching the highest in a month.LME copper climbed 1.6 percent to $6,296 per metric ton, after reaching the highest in nearly 10 weeks on the biggest increase in a month.

"But this is merely a cease-fire", he said.

So let's celebrate for now, while recognizing that the trade war could easily still escalate a couple months into 2019.

Both Yeung and Liao said the key lies in what Beijing may be able to do to turn around its Made in China 2025 Initiative.

There was no immediate response on Monday from the Chinese Commerce Ministry about whether Beijing had made such a pledge. Optimism was dented slightly after Qatar said it was leaving OPEC, just as the group prepares to meet this week.

Parag Khanna, founder of the FutureMap consultancy and author of the forthcoming book "The Future is Asian", noted that in speeches to domestic Chinese audiences, Xi is still promoting the economic self-reliance that Made in China 2025 symbolizes. But there is still room for negotiation on some aspects.

German carmaker BMW and Ford's Lincoln brand have also been hit hard by the tariffs with some of their cars made in the U.S. for the Chinese market.

One expert said China would have to address United States complaints about China's forced transfer of intellectual property rights - a major issue at the core of a USA "301" trade investigation - for Washington to drop its tariffs. Once again highlighting the "very special" relationship between the leaders, Trump expressed hope that they can reach an understanding that "will be good" for both nations.

"I believe it's hard to complete all the related tasks and resolve all the issues clearly within 90 days. However, the USA threatened that if no agreement is reached after this period, the 10% tariff rate on USD200bn worth of Chinese goods will be raised to 25%".

Both sides certainly came prepared for serious discussion.

FILE - Mike Starkey offloads soybeans from his combine as he harvests his crops in Brownsburg, Indiana, Sept. 21, 2018.

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

Of course, economists are not convinced that a trade deficit is even a bad thing.

The article suggested that Navarro's attendance perhaps shows the deal had the support from what the article said was "trade hawks".

In comments last week, Trump referred to China as "ripping off our country for many, many years".

"Whether we will see further de-escalation or whether it is temporary reprieve continues to be very much up to a political decision in Washington DC - that will continue to make this uncertain", Louis Kuijs, the head of Asia economics at Oxford Economics, said.

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