U.S. and China approach in the trade dispute

With the United States and China locked in growing disputes over commerce and security that have raised questions about the future of their relationship, Trump and Xi are due to sit down for dinner at the end of a two-day gathering of world leaders in Buenos Aires.

The United States has slapped steep tariffs on Chinese goods valued at $250 billion since the beginning of July, while China has retaliated with reciprocal tariffs on $110 billion worth of U.S. goods.

"They put on the table an offer of over $1.2 trillion in additional commitments".

Chinese Foreign Minister Wang Yi issued a similar statement stressing on the consensus both leaders reached, without mentioning the 90-day time limit. And the threat to slap tariffs on everything China exports to the US will presumably be back on the table as well.

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

However, Andrew Hunter, US economist for Capital Economics, said he is optimistic that the apparent "ceasefire" will hold, even though the two sides have been in similar positions before. "It is my great honour to be working with President Xi".

"They can not slow walk this, stall this, meander this". The structural reforms include ending China's unfair trade policies and practices 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.

China is poised to start immediately purchasing more USA agricultural products, Trump said in a Monday tweet that China agreed to "reduce and remove" tariffs on imported American-made cars, an assertion that official in Beijing have refused to confirm.

In the agreement, Trump agreed not to boost tariffs on $200 billion of Chinese goods from 10 percent to 25 percent on January 1 in exchange for Beijing pledging to buy a "very substantial" amount of agricultural, industrial and energy products, according to the US.

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Asian and European stock markets jumped on Monday, with Hong Kong and Shanghai closing sharply higher and the yuan strengthening after months of trade-war turbulence.

USA officials insist that the American economy is more resilient to the tumult than China's, but they remain anxious of the economic effects of a prolonged showdown - as Trump has made economic growth the benchmark by which he wants his administration judged.

With the United States and China clashing over commerce, financial markets will take their lead from the results of the talks, widely seen as the most important meeting of USA and Chinese leaders in years.

Just as importantly, these new agreements pave the way for the next round of trade negotiations between the two biggest economies in the world.

"Both parties agree that they will endeavor to have this transaction completed within the next 90 days", the White House said.

The White House is stepping up efforts to prod other countries to build more vehicles in the United States. Trump wrote on Twitter.

Trump's tweet did not explain which tariffs would be reduced or removed, or when China would act. Chinese regulators in July blocked Qualcomm's $44 billion takeover bid for its Netherlands-based rival, NXP Semiconductors NV. The symbolism ahead of the Xi meeting was clear: The Trump administration has looked to find common cause with both nations in countering China's regional hegemony.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

(Copyright © 2015. All Rights Reserved.)
 
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