TRUCE IN U.S. – CHINA TARIFF WAR DELAYS THREATENED INCREASE TO 25%
President Trump’s sideline meeting in Argentina with China President Xi Jinping has produced a tentative pause in the ongoing tariff war between the two countries.
Although many details are not yet known, the U.S. announced it would hold off on higher tariff rates (from the current 10% to 25% on List 3 on January 1, 2019) for at least 90 days, while China plans to buy a ’very substantial’ amount of U.S. farm and energy goods.
Meanwhile the two sides will wrangle over thorny issues such as intellectual property, cyberattacks, and China’s treatment of workers in the hopes of reaching a broader trade agreement.
Markets reacted positively, and most analysts and business groups greeted the news of the truce as a welcome ‘detente,’ although some cautioned that the differences on the difficult issues remain vast, and tough negotiations lie ahead.