President Trump has staked out his turf on the trade war with China – massive new tariffs…which generated retaliation by China.
End of Round 1.
But now, having met with Chinese head of state Xi Jinping at the G20 summit in Buenos Aires, the two have agreed to a 90 day “truce” on these tariffs…which gives China – the big loser if they go through – an opportunity to cut a deal with Trump that has the appearance of not knuckling under.
In other words, an opportunity for Xi Jinping to save face.
Excerpted from Keven Breuninger and Javier E. David’s article for cnbc.com:
Chinese President Xi Jinping and U.S. President Donald Trump put their bilateral trade war on pause momentarily, striking an agreement to hold off on slapping additional tariffs on each other’s goods after January 1, as talks continue between both countries.
In a White House readout of a dinner at the G-20 summit in Argentina, Xi and Trump discussed a range of nettlesome issues — among them the trade dispute that has left over $200 billion worth of goods hanging in the balance.
“President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent at this time,” the statement read. Over the next 90 days, American and Chinese officials will continue to negotiate lingering disagreements on technology transfer, intellectual property and agriculture.
“Both parties agree that they will endeavor 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 percent tariffs will be raised to 25 percent,” the statement added.
End of Round 2.
If things continue to go as they are, Round 3 will be the agreement to, and implementation timetable for, that new, presumably more reasonable, deal.
Whether it ultimately plays out this way remains to be seen. But the progression that would cause it to do so is in place.
So far, so good.