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G20: US and China agree to suspend new trade tariffs

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US President Donald Trump, US Secretary of State Mike Pompeo, US President Donald Trump's national security adviser John Bolton and Chinese President Xi Jinping attend a working dinner after the G20 leaders summit in Buenos Aires, Argentina, 1 December

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Reuters

Image caption

Mr Trump (front right) last met Mr Xi (front left) last year

US President Donald Trump and his Chinese counterpart Xi Jinping have agreed to halt new trade tariffs for 90 days to allow for talks, the US says.

The two men met in Buenos Aires after the G20 summit for their first talks since a trade war erupted this year.

China says they agreed not to impose any new trade tariffs after 1 January.

At the summit earlier on Saturday, the G20 leaders agreed a joint declaration that notes divisions over trade but does not criticise protectionism.

What was agreed?

Ahead of the G20, Mr Trump had told US media he expected to go ahead with plans to raise tariffs on $200bn (£157bn) of Chinese goods – first introduced in September – from 10% to 25%, starting in January.

The White House says this move is now suspended for 90 days but adds, “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.”

In return, the White House adds, China agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products.

Chinese state TV said earlier: “No additional tariffs will be imposed after January 1, and negotiations between the two sides will continue.”

Both sides have imposed tariffs on billions of dollars’ worth of goods. The US has hit $250bn of Chinese goods with tariffs since July, and China has retaliated by imposing duties on $110bn of US products.

Mr Trump had also said that if talks in Argentina were unsuccessful, he would carry out a threat to hit the remaining $267bn of annual Chinese exports to the US with tariffs of 10-25%.

US-China trade divisions meant an Asian economic summit earlier this month was unable to agree a formal leaders’ statement for the first time in its history.

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EPA

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Mr Trump (C) earlier signed a new trade agreement on Friday with his Mexican and Canadian counterparts

How did Trump sum up the talks?

Returning from the G20 summit on Air Force One, Mr Trump told reporters “it’s an incredible deal” that would have an “incredibly positive impact on farming”.

“What I’d be doing is holding back on tariffs. China will be opening up. China will be getting rid of tariffs,” Mr Trump said.

Analysis

Stephen McDonell, BBC China correspondent in Beijing

China has pretty much given up nothing in this deal because the future tariffs threatened from the Beijing side were retaliatory in nature and only to be applied if the United State escalated.

For this it has gained a 90-day reprieve, during which time both sides have pledged to ramp up talks.

When China’s Foreign Minster Wang Yi spoke to reporters after the meeting he said the two leaders had agreed to open up each other’s markets and that this process could lead to the resolution of “legitimate” US concerns.

This was either an acknowledgment that Washington does have legitimate concerns or a way of differentiating those American concerns which are reasonable from those which are not actually “legitimate”.

This is not a suspension of the trade war but a suspension of the escalation of the trade war.

Big questions remain about the preparedness of Beijing to allow international access to this enormous market to a level that would satisfy the Trump administration prompting a complete halt in the trade war.

On other issues, the US president announced he would be “formally terminating Nafta [the North American Free Trade Agreement] shortly”.

This would give lawmakers six months, he said, to approve a new trade deal agreed with his Mexican and Canadian counterparts on Friday or revert to trade rules from before 1994, when Nafta took effect.

He also said he was likely to meet North Korean Leader Kim Jong-un in January or February and three locations for their second meeting were being considered.

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Reuters

Image caption

Mr Trump and Mr Kim met for the first time in unprecedented talks in June in Singapore

Mr Trump added that he would also invite Mr Kim, with whom he has “a good relationship”, to the US at some point.

What else happened in Buenos Aires?

French leader Emmanuel Macron told reporters that the World Trade Organization, the body that regulates trade disputes, needed to be modernised.

A senior US official told Reuters that it was the first time that the G20 had recognised that the WTO was “currently falling short of meeting its objectives” and needed reform.

On Friday Mr Trump briefly met Russian President Vladimir Putin on the sidelines of the G20, a Russian official told Reuters.

Earlier the US president said he had postponed a planned press conference “out of respect for the Bush family”, following the death of former President George HW Bush, at the age of 94.

Earlier on in the summit, emerging economies denounced protectionism.



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