"It's
A Truce": Trump, Xi Agree No New Tariffs After January 1, Keep
Tariff Rate At 10%
1
December, 2018
Update: Well
over an hour after "the most anticipated dinner between US and
Chinese presidents in years" was over, Chinese state-run TV,
CGTV, finally reported that Trump
and Xi had agreed to keep the US-Chinese trade war from escalating
with a promise to temporarily halt the imposition of new tariff,
effectively declaring a truce.
As
part of the truce reached between the two leaders, no additional
tariffs will be imposed after Jan. 1, CGTN reported.
Meanwhile,
according to the White House, Trump and Xi had a "highly
successful meeting", with the White House saying that Trump had
agreed to leave tariffs on US products at a 10% rate after January 1
as China agreed to buy a substantial amount of products from the US.
More
importantly, and in what may be a victory for Trump, the White House
said that China has agreed to start purchasing very substantial US
agricultural, energy, industrial and other products "immediately"
from the US to reduce the trade imbalance; the White House also said
that the US and China agreed to try to reach an agreement on several
trade issues "within the next 90 days."
Xi
agreed to designate fentanyl as a controlled substance, “meaning
that people selling fentanyl to the United States will be subject to
China’s maximum penalty under the law,” Sarah Huckabee Sanders
says, quoted by Bloomberg. If China actually enforces this, could
help reduce opioid deaths.
One of Trump’s goals for Xi dinner was to get China to do more to halt flow of synthetic opioid fentanyl into US.
Fentanyl exporters have skirted Chinese laws by shifting to analogues.
No word yet from WH yet on progress on fentanyl. bloomberg.com/news/articles/…
NEW: Xi agreed to designate fentanyl as a controlled substance, “meaning that people selling fentanyl to the United States will be subject to China’s maximum penalty under the law,” Sarah Huckabee Sanders says.
If China actually enforces this, could help reduce opioid deaths.
Finally,
the White House also said that president Xi is open to approving the
Qualcomm-NXP deal if it was presented again. And just
like the the mega-M&A arb is back on the screen.
Back in China, Vice Commerce Minister Wang Shouwen spoke to reports and said that US and China agreed to step up talks on canceling all tariffs.
Finally,
China's foreign minister Wang Yi held a briefing in which he said
that US-China relations must be good following constructive trade
talks, and that the two nations had agreed to exchange bilateral
visits. Yi also said that China and the US had agreed to open markets
to each other, with China agreeing to increase US imports as well as
addressing its trade imbalance. Wang also said that legitimate US
concerns will be resolved as China open and that China will step up
talks to eliminate all tariffs.
In short, Wang Yi said that Trump and Xi will step up talks to eliminate all tariffs, while in a blow to US-Taiwan relations, the Chinese foreign minister also said that the US would agree to continue upholding the one China policy.
The
truce was expected by many and hinted at by Trump's optimistic tone
at the start of the dinner: “My relationship is very special, the
relationship that I have with President Xi,” Trump said as the two
men were seated. “This is going to be a very primary reason why we
are probably going to be ending up.
That
said, aside from preserving the status quo on the current state of
the trade war which means no additional tariffs and no hikes to the
tariffs rates, nothing has really changed besides a few vague
promises from both sides to reach trade utopia, something which both
sides know will never happen.
* *
*
Earlier:
The
much anticipated dinner meeting between US President Donald Trump,
Chinese President Xi Jinping and their respective entourage, has
finished, lasting more than two and a half hours, and concluding on a
positive note on Saturday. According
to the SCMP,
discussion about de-escalating tensions between the world's two
largest economies lasted
half an hour longer than scheduled,
which according to Bloomberg's Jennifer Epstein suggests that "the
conversation might’ve been constructive."
While
details of the outcome are yet to be released, both sides reportedly
looked happy at the end of the gathering, with applause heard in the
room as the dinner drew a close.
Trump meets Xi for the first time in more than a year: “This is a very important meeting.... At some point we are going to end up doing something that is great for China and great for the United States.''
In
fact, according to SCMP editor Chungyan Show, the dinner went "so
well the two sides decide to take a "family photo" at the
end - which is not something in the original plan."
The dinner between Trump and Xi's team lasted longer than planned. At the end of the dinner, a big applause can be heard in the room. Signs bode well for a deal between the two. SCMP will have more information soon. bit.ly/2U3TE3Y
In fact, it is going so well the two sides decide to take a "family photo" at the end - which is not something in the original plan.
As
he was preparing to sit down with Trump, Xi was quoted as saying that
he was “very happy” to be meeting with Trump after the conclusion
of the Group of 20 summit, and that he saw the occasion as an
“opportunity to exchange views”.
“Xi
Jinping said at the beginning that he was very happy to meet with the
president,” China’s state news agency Xinhua reported shortly
after the bilateral meeting began in Buenos Aires, Argentina.
“Since
the last meeting, there have been many new changes in the world
situation. As two big countries, China and the United States have
important influences and share important responsibilities in
promoting world peace and prosperity,” the report quoted Xi as
saying.
“Cooperation
is the best choice for both sides. I would like to take advantage of
the opportunity tonight to exchange views with the president on
issues of common concern and plan for the next phase of Sino-US
relations.”
While
the contents of an agreement, if any, have yet to be leaked, what is
known is what was served during the dinner between Trump and Xi:
grilled sirloin steaks paired with a malbec from the Argentine winery
Catena Zapata; it's unclear if that is bullish or bearish. Also,
since Trump doesn't drink, he most likely had a diet coke.
But
in what may be the biggest surprise of the night, Trump reportedly
rolled away from the Park Hyatt hotel and headed to the airport and
back to D.C., and
there has bee no readout from the White House yet of his meeting with
Chinese President Xi.
And
until then, we look forward to flashing red headlines of media leaks
describing what was said and done, what was agreed what wasn't...
Awaiting a fuller readout on the Xi meeting from the White House, but while boarding Air Force One, National Economic Council Director Larry Kudlow said the meeting went “very well.”
Traders,
investors, pundits and reports are all hoping that Trump will have
some (encouraging) comments for them from Air Force 1, or else the
most expected dinner in years between the two leaders will have been
an epic dud.
And
until then, we look forward to flashing red headlines of media leaks
describing what was said and done, what was agreed what wasn't...
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