Excerpt below of “China trade war on hold”
Almost exactly as we predicted here last week, President Trump and Chinese President Xi Jinping essentially called a trade war cease fire after their dinner at the G-20 on Saturday night in Buenos Aires. Trump will keep the current tariff rate at 10 percent on Jan. 1 rather than goose it to 25 percent. And for now he will not push ahead with tariffs on the next $267 billion in Chinese exports to the U.S.. In return, the Chinese agreed to designate fentanyl as a Controlled Substance, a big win in the battle with opioid addiction in the U.S.
The Chinese also agreed to purchase a “very substantial … amount of agricultural, energy, industrial, and other product from the United States” to cut the trade deficit. China also “agreed to start purchasing agricultural product from our farmers immediately,” welcome news for struggling soybean farmers.
The agreement also set a 90-day clock for more talks aimed at “structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.” Getting all this done in 90 days will be next to impossible. But significant progress would probably mean extensions.
Cumberland’s David Kotok emails: “Finally a truce in the Trump Navarro Trade War allows this failing protectionism policy to stop spiraling down. Markets will have temporary relief. Damage already done is likely irreparable but a tourniquet can stop the bleeding. This wound will take years to heal.”
Read the full newsletter at POLITICO.