Resolving the tariff war between the USA and China is seen as crucial for American agriculture, particularly soybeans, America's largest export to China, which accounted for $12.4 billion in sales past year. China gets a delay on additional tariffs, while the US gets greater purchases of agriculture goods while retaining leverage to push for more structural changes to the economy.
In exchange, the USA wants an immediate start to talks on Trump's biggest complaints about Chinese trade practices: intellectual property theft, non-tariff barriers and forced technology transfer. Instead, those tariffs will remain in place but at the current, lower rate.
That fundamental disagreement shows the cracks in this latest compromise, and the looming challenges of reaching a deal and ultimately removing tariffs.
Trump's promise gives Xi political room to negotiate after Beijing said earlier talks were impossible while Washington "holds a knife" of tariff threats to China's throat.
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The White House said that if agreement on trade issues including technology transfer, intellectual property, non-tariff barriers, cyber theft and agriculture has not been reached with China in 90 days, that both parties agree that the 10 percent tariffs will be raised to 25 percent.
But Trump insisted that the United States was continuing to force China to make important concessions.
The cancellation means Trump will no longer face press questions over new developments this week stemming from a USA investigation into whether his presidential campaign colluded with Russian Federation, which has now spread to cover his past business dealings. Despite the positive talks so far, these policies will likely cause the most issues nearing the 90-day deadline.
Both farmers and the auto industry have been struck in the trade war, as the U.S. and China hit each other with escalating tariffs. While 11 months in 2016 had trade deficits with China that were lower than the same month the year before, every month since February 2017 has seen an increased deficit from the same month in the previous year.
Unrelated directly to trade, China has agreed to crack down on the production and distribution of Fentanyl.
Trump has thrown out the traditional United States playbook on free trade since his shock 2016 election, vowing to protect forgotten workers and demanding a renegotiation of the North American Free Trade Agreement with Canada and Mexico. Under the agreement, Trump is shelving a plan to raise existing tariffs of 10 percent to 25 percent from the first day of next year.
Still, Beijing gave no sign of a changed stance on technology ambitions that Washington says violate Chinese market-opening obligations and might threaten US industrial leadership. By midyear, soybean exports to China were down by 20.5%, according to CNBC.
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