Trade Truce With China Means Big Changes in Beijing Policy

USA and China stopped their war for three months

TRADE WAR: Europe and Asia stock markets higher as China and US agree CEASEFIRE

In a surprise announcement tweeted Sunday night, Trump also said China would "reduce and remove" tariffs of 40 percent on cars, though Beijing has yet to confirm the move.

"President Xi and I have a very strong and personal relationship".

The United States imposes a 2.5 percent tariff on imported cars but in July put an additional 25 percent tariff on Chinese vehicles as the first sanction against China's alleged infringement of intellectual property rights.

China said last week that tariffs on USA autos would be 15 per cent if not for the trade dispute, and it called for a negotiated solution. The Trump administration asserts, and many experts agree, that China systematically steals trade secrets and forces the US and other foreign countries to hand over sensitive technology as the price of admission to the vast Chinese market. The Week in the article USA and China agree trade war truce, writes that in return, "China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries", the statement read. "Currently, the tariff is 40%", he tweeted without providing further details.

"My meeting in Argentina with President Xi of China was an extraordinary one", Trump said on Twitter.

"China will still need to prepare for the worst scenario of a "decoupling" of the Chinese and American economies, in particular in the high-tech sector", Wang Yong, the director of the Center for International Political Economy at Peking University, said, adding that Beijing faced an increasingly hawkish Trump administration. "Farmers, I LOVE YOU!"

The White House later corrected him to say that the 90 days actually began on Dec 1, Saturday.

Both sides gained from hitting the pause button, with Trump avoiding further hits to U.S. agricultural exports, and Xi staving off an escalation of the pressure that higher tariffs would place on his country's slowing economy.

'Both parties agree that they will endeavour to have this transaction completed within the next 90 days, ' the newspaper said, invoking a deadline that only the U.S. side had mentioned on Saturday.

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The U.S. imposes a 27.5-percent tax on imported cars and light trucks from China.

Minutes later, the president specifically tied his self-congratulation to what he predicted will be a dramatic increase in farm exports from the U.S.to China.

Hong Kong's Hang Seng index is up 2.8 percent, while futures are pointing to a higher open in North America.

According to the agreement, the United States and China will not increase or introduce new tariffs for 90 days.

Trump, at his political rallies and news conferences, often praises the increase in USA military spending during his almost two years in the White House.

Asian markets rose after the presidents of China and the United States reached a temporary truce in their trade war.

"China right now has major trade barriers-they're major tariffs-and also major non-tariff barriers, which are brutal".

"With Trump himself having personally negotiated the latest deal, this one has a much greater chance of leading to a lasting truce", he wrote in a research note. Qualcomm scrapped its US$44 billion plan to purchase NXP after failing to acquire approval from China's State Administration of Market Regulation, which oversees anti-monopoly regulations.

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