Donald Trump and Xi Jinping agree to call temporary truce in trade war

The United States and China have struck a deal worth $200 billion ($A270 billion) over a steak dinner. 

Well, not a deal per se — more an agreement that President Donald Trump will postpone a plan to raise tariffs on $US200 billion ($A270 billion) worth of Chinese goods to 25 per cent, from 10 per cent, on January 1.

In turn, his Chinese counterpart, Xi Jinping, agreed to an unspecified increase in purchases of American industrial, energy and agricultural products, which Beijing slammed with retaliatory tariffs in the cumulative trade war.

Mr Trump and Mr Xi reached the compromise at a private dinner after the G20 summit in Argentina, over a two-and-a-half-hour meal of grilled sirloin and bottles of malbec wine on Saturday night.

“The relationship is very special — the relationship that I have with President Xi,” Mr Trump told reporters before dinner, according to The New York Times. “I think that is going to be a very primary reason why we’ll probably end up with getting something that will be good for China and good for the United States.”

“It’s an incredible deal,” he later said. “If it happens, it goes down as one of the largest deals ever made.

“What I’ll be doing is holding back on tariffs. China will be opening up, China will be getting rid of tariffs. China will be buying massive amounts of products from us.”

Mr Xi said: “Only with co-operation between us can we serve the interest of world peace and prosperity.”

Chinese Foreign Minister Wang Yi described the meeting as “friendly and candid”, adding that the two countries had taken a step towards eliminating all additional tariffs.

In a long-sought concession to the US, China also agreed to label fentanyl, the deadly synthetic opioid responsible for tens of thousands of American drug deaths annually, as a controlled substance, in what the White House described as a “humanitarian gesture”.

It means “people selling fentanyl to the United States will be subject to China’s maximum penalty under the law,” a White House statement said.

According to the White House statement, the leaders will also immediately begin negotiations on top US concerns relating to cyber theft, forced technology transfer and intellectual property.

The two countries have set an ambitious deadline of 90 days to complete negotiations. If they fail to reach a deal, tariffs will rise from 10 per cent to 25 per cent, as previously planned.

The Trump-Xi meeting was the marquee event of Mr Trump’s whirlwind two-day trip to Argentina for the G20 summit after the President cancelled a sit-down with Russian President Vladimir Putin over mounting tensions between Russia and Ukraine.

Mr Trump also cancelled a Saturday news conference, citing respect for the Bush family following the death of former President George H.W. Bush.

Mr Trump said Mr Bush’s death put a “damper” on what he described as a “very important meeting” with Mr Xi.

The United States and China are locked in a dispute over their trade imbalance and Beijing’s tech policies. Washington accuses Beijing of deploying predatory tactics in its tech drive, including stealing trade secrets and forcing American firms to hand over technology in exchange for access to the Chinese market.

Mr Trump has imposed import taxes on $250 billion ($A340 billion) in Chinese products — 25 per cent on $50 billion ($A68 billion) worth and 10 per cent on the other $US200 billion ($A270 billion). He had planned to raise the tariffs on the $US200 billion ($A270 billion) to 25 per cent if he couldn’t get a deal with the Chinese leader.

China has already slapped tariffs on $US110 billion ($A150 billion) in US goods. US 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 Mr Trump has made economic growth the benchmark by which he wants his administration judged.

A full-blown resolution was not expected to be reached in Buenos Aires, for the issues that divided them were so complex.

— with AP