BUENOS AIRES, Argentina — President Donald Trump and Chinese President Xi Jinping agreed on Saturday to a temporary trade ceasefire to allow time for more negotiations.
The move means that U.S. tariffs on $200 billion worth of goods will not rise to 25 percent on January 1, from 10 percent currently.
As part of the deal, China agreed to buy “a very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” White House Press Secretary Sarah Huckabee Sanders said in a statement.
Although precise quantities still need to be worked out, China will “start purchasing agricultural product from our farmers immediately,” Sanders said.
That would be welcome news for U.S. soybean and other agricultural producers, who have borne the brunt of Chinas retaliation against Trumps tariffs.
The news followed a nearly 2.5 hour dinner meeting between Xi, Trump and their top aides following the conclusion of the annual G20 leaders meeting.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said. “It is my great honor to be working with President Xi.”
The truce also follows months in which Trump has steadily ratcheted up pressure on China by imposing tariffs on more and more Chinese goods, spawning fears of a protracted trade war that could hurt growth in both countries and the world more broadly.
However, the deal begins a new 90-day clock for the two sides to reach an agreement on an array of tough issues, including forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cybertheft, services and agriculture.
“If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent,” Sanders said.
In another Chinese concession, Xi also told U.S. officials that he is open to approving Qualcomms bid to buy NXP Semiconductors should it again be presented, Sanders said.
The transaction failed to get Chinese regulatory approval earlier this year in what was widely seen as another tit-for-tat move in the trade war.
In another area, Xi also agreed to designate Fentanyl as a controlled substance, meaning that people selling the opiod to the United States would be subject to Chinas maximum penalty under the law, Sanders said.
On the sensitive issue of North Korea, Xi agree to work with that countrys leader, Kim Jong Un, “to see a nuclear free Korean Peninsula,” while Trump “expressed his friendship and respect for Chairman Kim,” Sanders said.
After ratcheting up the pressure on China for months, Trump sounded upbeat as the dinner was about to begin, emphasizing his “wonderful” relationship with Xi.
“Thats going to be a very primary reason that well probably end up getting something that is good for China and good for the United States,” Trump said.
When the dinner was over, both sides broke into applause and then posed for a group photo, according to a source briefed on the session.
The U.S. and China have been battling all year, first over Trumps decision to impose tariffs on all steel and aluminum imports in the name of national security. Then in an action aimed solely at Beijing, Trump began imposing tariffs on more and more of Chinas exports to the United States.
All that has transpired since Xi hosted Trump in Beijing slight more than a year ago.
The room was packed with senior officials from both sides of the Pacific.
The U.S. team included: Assistant to the President for Trade and Manufacturing Policy Peter Navarro, U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow, Secretary of State Mike Pompeo, chief of staff John Kelly, National Security Adviser John Bolton and senior adviser Jared Kushner.
The Chinese delegation also had heavy-hitters including Vice Premier Liu He, Chinas ambassador to the U.S. Cui Tiankai, and Ding Xuexiang, Xis chief of staff.
This year, Trump has imposed duties on $250 billion worth of Chinese goods, including a 25 percent penalty on an initial $50 billion and a 10 percent duty on the remaining $200 billion. The tariff on the larger batch is scheduled to rise to 25 percent on January 1 unless Trump decides to hold off.
The two sides have been discussing a list of 142 reforms that the United States would like to see, stemming from an investigation conducted by the Office of the U.S. Trade Representative into Chinas intellectual property practices. It accused the worlds second-largest economy of fueling its rise by forcing American companies to transfer technology or in other cases by tolerating outright intellectual property theft.
Chinese officials have indicated there are some U.S. demands that they could address in the short term, others that would take more negotiation and a third set that would be very hard to satisfy because of national security and other concerns.
At the same time, the Chinese have complained that its very difficult for them to know who is actually in charge of Trumps trade policy because there are so many voices on trade — often with widely disparate views — within the administration.
At various times over the past two years, Mnuchin, Commerce Secretary Wilbur Ross and Lighthizer have each appeared to be Trumps point man in talks with Beijing.
In addition, Navarro has encouraged Trump to keep up pressure on Xi to achieve meaningful reforms. His presence in Buenos Aires fueled concern that a ceasefire may not be reached. Hes argued that previous negotiations have been fruitless, a concern that could hang over the new set of talks.
“The game that China has played — and they played people in the Bush administration like a violin — is to do the tap dance of economic dialogue,” Navarro said recently at the Center for Strategic and International Studies. “Thats all they want to do. They want to get us to the bargaining table, sound reasonable, and talk while they keep having their way with us.”