China and the United States have agreed to halt additional tariffs as both countries engage in new trade negotiations with the goal of reaching an agreement within 90 days, the White House said on Saturday.
Trump agreed not to boost tariffs on $200bn of Chinese goods from 10 to 25 percent on January 1 as previously announced, while Beijing agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, the White House said in a statement.
China “is open to approving the previously unapproved” deal for US company Qualcomm Inc (QCOM.O) to acquire Netherlands-based NXP Semiconductors (NXPI.O) “should it again be presented”.
In July, Qualcomm – world’s biggest smartphone-chip maker – walked away from a $44bn deal to buy NXP Semiconductors after failing to secure Chinese regulatory approval, becoming a high-profile victim of the Sino-US trade dispute.
The White House said that if an 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 then both parties agree that tariffs will be raised to 25 percent.
Trump slapped 10 percent tariffs on $200bn in Chinese goods in September. China responded by imposing its own round of tariffs. Before the summit, Trump also threatened to impose tariffs on another $267bn of Chinese imports.
‘Friendly and candid’ meeting
The Chinese government’s top diplomat, State Councillor Wang Yi, said the negotiations were conducted in a “friendly and candid atmosphere”.
“The two presidents agreed that the two sides can and must get bilateral relations right,” Wang told reporters, adding they agreed to further exchanges at appropriate times.
“Discussion on economic and trade issues was very positive and constructive. The two heads of state reached consensus to halt the mutual increase of new tariffs,” Wang 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.”
Einar Tangen, a political analyst and investment banker based in Beijing, told Al Jazeera that the truce was “an excellent outcome” given the threats of escalation that preceded the meeting.
“Both sides were very leery. They have to be able to go home and say that they have accomplished something and I think both of them have,” he told Al Jazeera, adding that he did not expect China to yield on US demands regarding state-subsidisation of industry.
“This state-owned enterprise issue is not going to go away. Remember, this is a 90-day cooling-off period, there was 100 days last year. You’re still going to be running into the same impediments.
“China feels that it needs to go ahead, that it’s just passing the middle-income track level, that it needs to develop a tertiary economy, and they will not allow themselves to be subjugated by another nation,” he added.
Reporting from Beijing, Al Jazeera’s Adrian Brown said that it would be hard for both parties to reach a broader economic deal within the 90-day period.
“There remain fundamental areas of disagreement between these two sides, especially in the area of forced technology transfer and the fact that the US says that American companies who want to do business in China have to enter into 50-50 joint-venture arrangements and then hand over their know-how. The US is saying this has to stop.”
“There is one area where Xi Jinping is unlikely to yield and that concerns his industrial policy, known as Made in China 2025,” said Brown. “This is his aim, to make China a world leader in technologies of the future, things like artificial intelligence and robotics.
“But the US is saying that China will do this by heavily subsidising the companies involved and it says that has to stop. President Xi has maintained that it won’t,” he said.
Meanwhile, the White House also said that Xi agreed to designate the drug fentanyl as a controlled substance. For more than a year, Trump has raised concerns about the synthetic opioid being sent from China to the US, which is facing an epidemic of opioid-related deaths.
White House press secretary Sarah Sanders said the decision means that “people selling fentanyl to the US will be subject to China’s maximum penalty under the law”.