The United States and China have agreed a ceasefire in their trade war. After two days of negotiations in Washington, the two countries agreed on Friday evening on a partial agreement on mutual trade. President Trump was delighted with the breakthrough. He noted that the icy atmosphere in trade relations had given way to a “feast of love.”
The agreement means that the tariff increases that the US wanted to introduce on 15 October on Chinese imported goods with a total value of 225 billion euros will not go ahead for the time being. China, for its part, promised to buy more than 40 billion euros of agricultural products from the US.
The agreement has yet to be worked out in the coming weeks, but according to Trump it is a step in the right direction. The draft agreement also contains agreements on the protection of intellectual property and the access of American companies to the Chinese market.
Only recently Trump had threatened with additional levies on all products from China in anger over the increased import tariffs that China had announced as a countermeasure on American products. The US accuses China of foreclosing its market, forcing American companies to share technology and engaging in unfair competition by manipulating its currency.
According to the American finance minister Steve Mnuchin there is still much to do, but the fight break in the trade war is good for both countries. President Trump began to worry more and more about the damage that American farmers are suffering from the Chinese countermeasures as the American elections approached. The farmers are an important part of his electoral power base. But China is also concerned about the economic growth that is declining more and more.
As long as no tangible progress on the road to an overall trade agreement is made, Trump is sticking to the announced tariff increases for Chinese products scheduled for December 15. Earlier the US had already imposed additional levies for a whole series of products from China with a total value of 325 billion euros.