White House Hails China Trade Truce
The Trump Administration is celebrating the 90-day truce it reached in its trade dispute with China as a significant breakthrough despite some skepticism that Beijing will yield to US demands anytime soon.
“This is just an enormous, enormous event,” Larry Kudlow, President Donald Trump’s Top economic adviser, said of the accord that Presidents Trump and Xi reached at the weekend on the sidelines of the G-20 Summit in Buenos Aires, Argentina. “This one covers so much ground in some detail, we have never seen this before.”
During the talks in Buenos Aires, President Trump agreed to delay a scheduled escalation in US tariffs on many Chinese goods, from 10% to 25%, that had been set to take effect on 1 January.
Instead, the 2 sides are to negotiate over US complaints about China’s trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology. These practices, according to The Trump Administration include stealing intellectual property and forcing companies to turn over technology to gain access to China’s market.
In return for the postponement in the higher US tariffs, China agreed to step up its purchases of US farm, energy and industrial goods, the White House said.
President Trump’s complaints strike at the heart of the Communist Party’s state-led economic model and its plans to elevate China to political and cultural leadership by creating global champions in robotics and other fields.
The Trump-Xi meeting at pressed the “pause” button on tariff hikes.
Besides escalating existing tariffs, President Trump had threatened to impose import taxes on the remaining $267-B of US goods from China.
In the meantime, President Trump Tweeted late Sunday that China had agreed to “reduce and remove” its 40% tariff on cars imported from the US Treasury Secretary Steven Mnuchin said Monday that there is a “specific agreement” on the auto tariffs.
Larry Kudlow added, “We expect those tariffs to go to Zero.”
Details regarding China’s pledge to buy more American products are scant.
Secretary Mnuchin said Monday morning on TV that China had offered to buy up to $1.2-T of additional US goods, while the “details of that still need to be negotiated.”