Trump says Xi agreed to one-year trade deal after ‘amazing’ talks

Donald Trump and Xi Jinping, the president of China, have come to terms with a heated exchange that has threatened to destabilize the world economy.

Trump and Xi made the first-ever face-to-face meeting of the leaders of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea on Thursday, sealing the one-year trade truce.

However, Trump and Xi’s agreement did little to remove existing trade barriers and left numerous points of disagreement between the&nbsp, sides unresolved, despite offering a reprieve to businesses left by months of back-and-forth trade disputes.

Dennis Wilder, a professor at Georgetown University who worked on China at the CIA and the White House’s National Security Council, told Al Jazeera, “The apparent results of this meeting will be a pause and a small roll back in the trade war.”

According to Wilder, “Both sides have agreed to stop firing as long as both sides adhere to the agreements,” but neither side has given up its trade weapons.

China agreed to put its planned export restrictions on rare earths on hold as part of the agreement, and the US will remove a threatened 100-percent tariff on Chinese goods.

After Xi said, “working very hard,” Trump said he would also lower a 20 percent fentanyl-related tariff to 10 percent after agreeing to “work very hard” to stop flows&nbsp, of the synthetic opiate.

After departing South Korea, Trump said, “I believe he is going to work very hard to stop the death that is coming in.”

Trump, who described his nearly two-hour meeting with Xi as “amazing,” said the agreement had been “settled” and would be renegotiated annually.

On rare earths, there is no roadblock, according to Trump, who hopes to have it out of our vocabulary for a while.

Trump claimed that China had also agreed to buy “tremendous amounts” of American soybeans as a result of his meeting with Xi, which ended a frantic tour of Asia that included stops in Malaysia and Japan.

Xi claimed that the parties had reached a “consensus to address problems” during the discussions, but he did not directly address the terms of the deal.

According to a readout released by the state-run Xinhua News Agency, Washington and Beijing should “promptly refine and finalize follow-up actions” to implement the consensus and “offer tangible results to reassure both countries and the global economy.”

Later, the Chinese Ministry of Commerce confirmed certain aspects of the agreement, including the one-year extension of its export controls.

The US and China’s governments agreed to suspend plans to impose export controls on technology to Chinese subsidiaries, according to the ministry, and both sides agreed to suspend tit-for-tat port fees.

Benchmark indexes in Hong Kong, Shanghai, and Sydney closed lower, while Japan’s main index finished flat, which was largely unmoving in Asia.

Concerned about significant disruption to global supply chains were China’s plans to require businesses anywhere in the world to obtain a license to export goods containing even trace amounts of its rare earths.

The crucial minerals are almost a monopoly on supply from Chinese producers, which makes everything from smartphones to fighter jets.

The fentanyl tariff’s reduction, according to Shan Guo, a partner with Hutong Research in Shanghai, was “largely anticipated.”

Guo cited US-China trade negotiations that took place in the Swedish capital in July as evidence that China has been using rare earth as leverage to obtain the fentanyl cut since Stockholm.

“US still wants to maintain some leverage as the two parties talk more,” the spokesperson said. However, this lower tariff on China will lessen the competitive disadvantage of Chinese goods over those of ASEAN peers, Guo said, referring to the Southeast Asian economies, which are largely dependent on exports, a bloc of 11 countries.

Prior to the summit, there were low expectations for a deal, and the agreement on Thursday left the most significant tariffs and export controls preventing trade between the parties.

Trump’s plan to reduce the US tariff on fentanyl would leave the country with a 47% and a 32% average US duty on Chinese goods.

The agreement, according to Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, could be seen as a “minor rollback” or “partial freeze” in the US-China trade war.

According to Cameron Johnson, a partner at Shanghai-based consultancy Tidalwave Solutions, the agreement was “probably the best both sides could have done given the circumstances,” and it should not soon begin to deteriorate.

Johnson, however, took note of Trump’s assertions that the agreement would be subject to annual reviews.

Source: Aljazeera