The Trump trade war will drift into 2019

Argentine president opens G-20 Summit

Argentine president opens G-20 Summit

That President Xi agreed to designate fentanyl a controlled substance, meaning that Chinese selling the powerful synthetic drug to the U.S. will be subject to maximum penalties, is also important to President Trump, who has made fighting America's raging opioid epidemic a priority.

With the United States and China clashing over commerce, financial markets will take their lead from the results of the talks, widely seen as the most important meeting of USA and Chinese leaders in years.

The meeting was the first face-to-face encounter between the leaders in more than a year, a period that saw Trump impose tariffs on billions of dollars in Chinese imports in a bid to force Beijing to halt trade practices the USA considers unfair. Also on Wednesday, U.S. Trade Rep. Robert Lighthizer criticized China for imposing 40 percent tariffs on U.S. auto imports, compared to the 15 percent it imposes on auto imports from other country, calling tariffs "egregious".

Wang did not give as many details as the White House, but said: "China is willing to increase imports in accordance with the needs of its domestic market and the people's needs, including marketable products from the United States, to gradually ease the imbalance in two-way trade".

Hong Kong's business leaders are cautiously optimistic about a 90-day trade truce agreed by China and the United States, hoping the disputes can be settled within the time frame as some ponder relocating factories to Southeast Asia.

World leaders, including Trudeau and U.S. President Donald Trump, centre, get ready for a summit family photo in Buenos Aires on Friday. Paul Ashworth, chief US economist at Capital Economics, notes that if talks fail, tariffs would rise on the $200 billion of goods already on the receiving end, and would be imposed on the remaining $250 billion that are, so far, penalty-free.

The cease-fire will buy time for the two countries to work out their differences in a dispute over Beijing's aggressive drive to supplant US technological dominance. Both parties agreed to complete negotiations within 90 days.

The two countries are also at odds militarily over China's extensive claims in the South China Sea and USA warship movements through the highly sensitive Taiwan Strait.

Qualcomm announced it was dropping plans to proceed with the deal after it failed to receive Chinese government approval.

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On Air Force One, Trump told reporters he would "absolutely consider it and probably" accept such a measure. "And I think at some point, we're going to end up doing something which is great for China and great for the United States".

Trump, who made USA trade policy a central plank of his platform as a presidential candidate in 2016, wants to address specific gripes with China's trade practices, especially its alleged theft of US intellectual property.

He said under the deal China would buy a "tremendous amount of agricultural and other product" from the United States. "I may still move some factories, not all of them, to Southeast Asia", Lau said.

Applause broke out in the convention center hall as the leaders, including Trump, signed off on the statement at the end of the two-day summit in the Argentine capital, the first time it has been held in South America.

Following more than two hours of dinner talks between the two leaders, the White House said an increase of tariffs from 10 to 25 per cent due to kick in on Jan 1 would now be put on hold, providing room for intense negotiations.

Investors have been holding their breath about the meeting between Trump and Xi as any consensus over trade can bring some relief to global markets. "If we could make a deal, that would be good", Trump told reporters Friday as he met Japanese Prime Minister Shinzo Abe on the first of the summit's two days.

"On Trade, President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time", the statement said.

"This was an wonderful and productive meeting with unlimited possibilities for both the United States and China", Trump said in a statement issued from Air Force One as he returned to Washington.

The "coalition" against the United States on climate change was beginning to fray, a senior White House official said, adding that several countries, including Turkey, Russia and Saudi Arabia, had balked at signing the document before finally backing it. The statement offered virtually no concrete promises and, under pressure from US President Donald Trump, avoided language on fighting protectionism and acknowledged Washington's disagreement on battling climate change.

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