Donald Trump and Xi Jinping agreed to a 90-day trade truce to allow for additional negotiations to address US concerns after China agreed to buy a “very substantial” amount of American exports, the White House said in a statement released late on Saturday.
Chinese officials agreed that the country would buy more US products in an effort to reduce the large bilateral trade imbalance.
Trump agreed to postpone for 90 days a scheduled increase in tariffs on US$200 billion in Chinese imports while talks to address American concerns about China’s trade practices take place.
If there is no deal at the end of the 90-day grace period, the US will increase the tariffs on the US$200 billion of goods from 10 per cent to 25 per cent. The negotiations, and therefore the 90-day timeline, start immediately.
“President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture,” according to the White House statement.
“Both parties agree that they will endeavour to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 per cent tariffs will be raised to 25 per cent.”
As part of the ceasefire deal, China agreed to purchase a “very substantial amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately”.
However, the exact value of the purchases has not yet been agreed, the White House said.
Chinese Foreign Minister Wang Yi told reporters that China had agreed to import more US goods “according to its domestic market and people’s demands”, which will include “buying more products from the US to gradually address the trade imbalance”.
Wang also said that China would gradually solve the “legitimate concerns” of the US side, but did not elaborate.
Wang said the two sides would continue negotiations with the goal of “removing of all additional tariffs”.
Xi and Trump had “friendly and candid” talks over dinner and reached an “important consensus,” with China agreeing to buy more from the US to address the bilateral trade imbalance, the Chinese foreign minister said.
Dinner discussions about de-escalating tensions between the world’s two largest economies lasted an hour longer than expected.
Both sides appeared satisfied at the end of the gathering, and applause was heard in the room as the dinner drew a close.
Before he sat with Trump, Xi said he was “very happy” to be meeting his US counterpart and saw the dinner as an “opportunity to exchange views”, according to the state news agency Xinhua. The White House described the meetings as “highly successful.”
In addition to trade, Trump and Xi discussed other issues, including the US opioid crisis and Taiwan. Xi agreed to designate fentanyl as a controlled substance, following complaints that inadequate regulations on pharmaceutical and chemical production were hampering America’s efforts to stem the flow of synthetic opioids from China.
The decision, which the US described as a “wonderful humanitarian gesture” and listed as the first item on the White House statement, means that those selling the drug to the US “will be subject to China’s maximum penalty under the law”.
Meanwhile, Wang said the US had agreed to stick to the one-China policy regarding Taiwan, although the White House’s statement did not mention the island.
The US has in the past acknowledged the one-China position without recognising Beijing’s sovereignty over Taiwan.
Beijing, which regards Taiwan as a breakaway province, views the island as a core interest and has warned the US against supporting pro-independence forces and demanded that it cut off military exchanges.
China also expressed support for Trump meeting North Korean leader Kim Jong-un for a second time, with Wang adding that the US had expressed its appreciation of China’s role in help to push the North towards denuclearisation.