Talks between Chinese President Xi Jingping and Donald Trump during the G20 Buenos Aires summit concluded with verbal agreements to postpone further tariffs from either side for a period of 90 days.
The Trump-Xi meeting, conducted during the G20 summit being held in Argentina, concluded with a major concession by the United States and some equally-surprising concessions from China.
According to a statement just released by the White House, Donald Trump has agreed to hold off on increasing tariffs scheduled to go from 10% to 25% as of January 1, 2019. Trump has also agreed not to proceed with a plan to apply tariffs to the other $267 billion worth of Chinese imports which enter the U.S. annually, for now at least.
In parallel, China will hold off on any further tariffs of its own. President Xi has further agreed to purchase a “very substantial” amount of industrial, energy, and food products from the United States, with the agricultural purchases happening almost immediately.
China also apparently is now “open to approving the previously unapproved” plan for U.S.-based Qualcomm to purchase Netherlands-based NXP Semiconductors. China had previously held off regulatory approval for Qualcomm to purchase the company as part of an estimated $44 billion acquisition.
In an important side agreement, President Xi also agreed to designate fentanyl formally as a controlled substance. This appears to be a concession to a U.S. government report which came out last week as highly critical of China’s meager attempts to keep local synthetic opioid producers under tighter control.
Both China and the U.S. have agreed that they must reach agreements on a variety of trade and legal issues within the 90-day tariff ‘hold’ period. Those issues include everything from cyber theft and alleged intellectual property crimes by China, to reaching agreement on removal of certain non-tariff barriers, technology transfer policies, and agricultural complaints. If the two countries do not reach common ground on these issues within the 90 days, the United States plans at least to go ahead with raising its Chinese import tariffs to 25 percent.