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.
The breakthrough came after a dinner meeting between President Donald Trump and Chinese leader Xi Jinping at the Group of 20 summit in Buenos Aires.
Trump agreed not to boost tariffs on $200bn of Chinese goods 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 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.
Trump slapped 10 percent tariffs on $200bn in Chinese goods in September. China responded by imposing its own round of tariffs. Trump has also threatened to add 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.”
Xi also agreed to designate the drug fentanyl as a controlled substance, the White House said. For more than a year, Trump has raised concerns about the synthetic opioid being sent from China to the United States, which is facing an epidemic of opioid-related deaths.
White House press secretary Sarah Sanders says the decision means that “people selling fentanyl to the United States will be subject to China’s maximum penalty under the law.”