Trump-Xi consensus reached on trade but statements differ — Global Geopolitical Series

Lloyd Doyle
December 5, 2018

The US and China have been locked in a bitter trade war for several months with the two economic powerhouses sparring in a tit-for-tat slapping of sanctions on each other. The Stoxx Europe 600 Index was up by 1.62 percent to 75.9100 at around 09:45 GMT, as carmakers remained at the forefront of gains.

'Both parties agree that they will endeavour to have this transaction completed within the next 90 days, ' the newspaper said, invoking a deadline that only the USA side had mentioned on Saturday.

Further, the differences between the statements released by the USA and China suggest that the two sides hold substantial gaps about expectations for negotiations.

China agreed to resume purchases of some U.S. farm and energy commodities.

On Twitter, he said farmers would be a "very BIG and FAST beneficiary" and described the meeting with Chinese President Xi Jinping as "extraordinary".

The agreement so far lacks detail, but allows the US and China an additional 90 days to negotiate an agreement.

China has hit back with similar tariffs on $110 billion worth of goods made in the United States. It is also likely to be a good news for the stock markets in the USA and China.

What was agreed at the G20? .

Kudlow initially said that the Chinese had 90 days from January 1 to come up with "structural changes" regarding intellectual property protections, forced technology transfer and other issues. The U.S. will postpone until March 1 a plan to raise tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent, with Washington set to resume talks with Beijing in hopes of a longer-term deal on trade. Fresh from the meeting of world leaders at the G20 summit in Buenos Aires, Argentina, Donald Trump tweeted that China had agreed to cut import tariffs on American-made cars.

He gave no details, and there was no immediate response from the Chinese government.

What's missing in China's official statement?

Through a translator, Xi said that "only with cooperation between us can we serve the interest of global peace and prosperity and that is why I look forward to this meeting".

The not-so-subtle disparities between the United States and Chinese official statements highlight how much a gap needs to closed in the three-month trade war time-out.

The president also touted an agreement with China to reduce tariffs on cars entering China from the United States.

Dealing with the central issue of China's forced technology transfers and subsidies "will require time, communication and good-will - a rare trifecta these days", he said.

On the non-trade issues, Beijing was more open, announcing that China will tighten supervision of Fentanyl and review rules on the drug.

President Trump's trade war with China is on hold.

What pushed the two sides to the table?

"China will still need to prepare for the worst scenario of a "decoupling" of the Chinese and American economies, in particular in the high-tech sector", Wang Yong, the director of the Center for International Political Economy at Peking University, said, adding that Beijing faced an increasingly hawkish Trump administration.

However, he has faced fierce criticism from U.S. business groups, as the tariffs lead to reduced exports of crops such as soybeans, while raising costs for businesses that rely on Chinese imports.

In China, tariffs have also weighed on the economy. Neither country had mentioned auto tariffs in their official read-outs of the Trump-Xi meeting.

Will this resolve the dispute?

. Whether this turns into a genuine armistice or just a momentary ceasefire remains to be seen. Auto sales in the world's second-biggest economy declined for a fifth consecutive month in October, bringing the market closer to its first annual drop in at least two decades.

"This is not a suspension of the trade war but a suspension of the escalation of the trade war", he writes and "big questions remain about the preparedness of Beijing to allow global access to this enormous market to a level that would satisfy the Trump administration prompting a complete halt in the trade war".

Other reports by Iphone Fresh

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