The Daily Update - US/China Thaw

This weekend we saw a thaw in the ongoing trade disputes between the world’s biggest economies, as US President Donald Trump and his Chinese counterpart Xi Jinping agreed to a temporary truce on trade disagreements at the G20 summit in Argentina. The pair agreed to stop all new trade tariffs for 90 days to allow for talks, whilst Trump agreed to maintain the 10% tariff on USD200bn worth of goods, not raising them ‘at this time’ ahead of the deadline on the 1st January 2019. In exchange, Jinping agreed China would purchase a ‘very substantial’ amount of energy, agricultural and industrial products from the US. Although the meeting between the two leaders was seen as ‘friendly and candid’, from the Chinese side at least, according to a White House statement, if both parties fail to come to an agreement within the 90 days the 10% tariffs will rise to 25%.

Trump, as always, was keen to take the credit for the (small) breakthrough. On his return journey from the summit he told reports ‘If it happens, it goes down as one of the largest deals ever made’ adding ‘It will have an incredibly positive impact on farming, meaning agriculture, industrial products, computers, every type of product’.

Trump also took to social media to boast about pressuring China into agreeing to reduce tariffs on imported cars. He tweeted ‘China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%’. Although this is not as big a win as it first seems. Trump was indeed correct that tariffs on foreign cars were 40%, however that tariff used to be 25%, which was reduced to 15% earlier this year. It was only after Trump hit China with tariffs that they bumped it up to 40%.

At least he’s humble about his achievements, as we can see from his tweet on Friday last week, ‘Oh, I get it! I am a very good developer, happily living my life, when I see our country going in the wrong direction (to put it mildly). Against all odds, I decide to run for President & continue to run my business-very legal & very cool, talked about it on the campaign trail...’

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