Trade Truce With China Means Big Changes in Beijing Policy

The United States said Monday it will need to see "something concrete" from China in the next 90 days to build a real agreement on trade, two days after Donald Trump and Xi Jinping called a truce in the escalating confrontation between the two powerhouses. China slapped a 25% tariff on US soybean shipments, among other levies, in response to Trump ordering punitive tariffs on Chinese imports to the U.S.

China has made more than $1.2 trillion in additional trade commitments as part of a deal reached by U.S. President Donald Trump and China's Xi Jinping and Beijing has vowed to take immediate steps on those promises.

"My relationship is very special, the relationship that I have with President Xi", he said as the two men were seated.

10 percent tariffs on US$200 billion worth of goods, effective September 24, 2018.

While the Trump administration emphasized trade issues such as a 90-day moratorium on raising tariffs and Xi's concession to buy "very substantial" amounts of USA goods, China focused on diplomacy, regional issues and an agreement to try to quickly resolve their differences.

The trade war has seen the U.S. and China hit each other with escalating tariffs in an attempt to make their domestically made goods more competitive.

"We are dealing from great strength, but China likewise has much to gain if and when a deal is completed", Trump wrote.

"We don't yet have a specific agreement on that", Kudlow said, apparently contradicting Trump's tweet on the matter. They intend to start purchasing agricultural product immediately.

China agreed to resume purchases of some United States farm and energy commodities.

The Buenos Aires deal shows that both sides are aware that the tariffs could damage the global economy, it said. Americans will get majority ownership in companies in China for the first time, which should help address those issues, he said on CNBC.

Speaking to reporters aboard Air Force One on Saturday, Trump said, "It's an incredible deal". Tariffs remain in place, but the 90 days pause would allow both of them to see if there is any genuine room for compromise. The confusion was exacerbated by the absence of a joint statement from the US and China following the dinner.

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

In China, Hong Kong's Hang Seng index and Shanghai Composite were up more than 2% in early trading, while Japan's Nikkei 225 rose more than 1%. However, if the negotiations fail to bear fruit in the next 90 days, tariffs would be raised to 25 percent.

Chipmakers rallied Monday after the U.S. and China reached a 90-day trade truce over the weekend.

Investors have been eager for signs of a progress toward keeping an already costly trade dispute from spiraling into a new and broader cold war.

The 90-day truce in the escalating trade war between the USA and China came during a dinner meeting between the two presidents following the G-20 summit of the world's biggest economies in Buenos Aires. The statement notes that the exact amount has not yet been agreed upon. While the United States and China have agreed to negotiate, China appears unlikely to fundamentally alter its policies, and it is unclear whether Trump will be satisfied with a deal that falls considerably short of his demands.