Published: Tue, December 04, 2018
Money | By Hannah Jacobs

US, China agree not to raise tariffs on Chinese goods

US, China agree not to raise tariffs on Chinese goods

On Monday, the Chinese yuan rose 1% to about 6.8853 per US dollar while the Australian dollar firmed 1% to $0.738 against the USA dollar, its highest point since August.

United States indexes rose about 1% on Monday, following gains in Europe and Asia.

We think mutual understanding on dollar-yuan exchange will likely be a part of any future trade agreement. "Farmers, I LOVE YOU!" he said.

Donald Trump was overheard saying "get me out of here" to an aide as he left the stage before a group photo at the G20 summit in Buenos Aires, Argentina, in the latest gaffe by the U.S. president.

"We didn't really give up anything to China".

Perhaps the most obvious impact of the trade dispute so far has been China's decision to nearly totally cut out imports of USA soybeans and energy commodities such as crude oil, coal and liquefied natural gas (LNG).

"The history here with China promises is not very good".

What was agreed at the G20?

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The two leaders also "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".

In return, China agreed to buy what the White House called a "not yet agreed upon, but very substantial" amount of US products to help narrow America's gaping trade deficit with China. "To the extent that serious discussions can be had between the USA and China, tariffs might be put off indefinitely", said Stephen Gallagher, an economist at Société Générale.

Wang said the two presidents agreed to keep in close touch with each other through visits, meetings, phone calls and correspondents to continue providing guidance for the bilateral ties.

China's official statement underlines that no higher tariffs will be imposed on January 1, 2019, but it does not mention the 90-day deadline.

These sales irk China because they directly conflict with Beijing's long-standing policy that there is only one Chinese government, and Taiwan is merely a breakaway province that will inevitably be reunited with the mainland.

Asia stocks had rallied on the news that Washington and Beijing would not impose any new tariffs during a three-month grace period, during which the two sides are meant to finalize a more detailed agreement.

Of China's $51 billion of vehicle imports in 2017, about $13.5 billion came from North America, including sales of models made there by non-U.S. manufacturers like BMW.

President Donald Trump is hitting pause in the escalating trade war with China after a meeting with President Xi Jinping.


Oil prices - down more than 20% last month amid renewed fears of a supply glut - also recovered some poise as investors bet on weaker damage to wider demand in the world economy. Federal data released last week says more than 70,000 people died of drug overdoses past year, and the rate of fatal overdoses involving synthetic opioids like fentanyl increased by 45% between 2016 and 2017. Rather, the White House's goal was "that there would be an indication, a kind of way ahead that the advisors could then pursue", Bolton said.

Will this resolve the dispute?

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Wall Street stocks also opened strongly, with the Dow Jones more than 400 points, or 1.6% higher in early trading - though it also saw gains pared back later.

"There should be no wishful thinking that the truce would end the trade war between the world's two largest economies", DBS strategist Philip Wee wrote in a research note.

But observers warned there were still major issues that need to be resolved, including access for U.S. companies and intellectual property protection.

However, "we remain skeptical of a substantial trade deal between the two economic giants".

Mr Trump has been willing to declare victory with only modest concessions in the past, pointing to new trade deals with South Korea, Canada and Mexico, he added. "Level the field!" Trump said.


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