U.S. And China Halt Trade War With Temporary Truce
MICHEL MARTIN, HOST:
We're going to spend a few minutes on trade policy now. The G-20 summit in Argentina has ended with a truce between the U.S. and China. The White House says President Trump has agreed to delay a scheduled tariff hike on Chinese goods for the next 90 days so that the two sides can have time to negotiate a trade deal. To understand what the Chinese are saying about this, NPR's Rob Schmitz reports from Shanghai.
ROB SCHMITZ, BYLINE: U.S. tariffs on $200 billion worth of Chinese imports were scheduled to increase from 10 to 25 percent on January 1. The White House says President Trump will maintain the tariff rate at 10 percent while both sides begin intense negotiations on a deal. If a deal cannot be made within 90 days, the tariffs will be raised to 25 percent.
BILL BISHOP: Which counts as a short-term victory for the Chinese, I think, because they - you know, they're more than happy to keep talking.
SCHMITZ: Bill Bishop runs a China newsletter, Sinocism. Though Xi Jinping also agreed to purchase what the White House calls a very substantial amount of U.S. products to draw down the trade deficit, Bishop says it's in China's interest to delay the U.S. tariff hikes. He says it'll give the Chinese more time to bolster its economy in case both sides fail to reach a solution on trade, which Bishop says is just the tip of the iceberg.
BISHOP: The trade is just one dimension of multi-dimensional relationship that's full of tensions and potential problems.
(SOUNDBITE OF PRESS CONFERENCE)
WANG YI: (Foreign language spoken).
SCHMITZ: At a press conference following the meeting, Chinese foreign minister Wang Yi was full of optimism, as was China's state media, which did not report the crucial details of the agreement, including the 90-day clause. Instead, Wang said both sides had made progress on key issues in their 2.5-hour meeting - issues like Fentanyl, a drug at the heart of America's opioid crisis. Xi Jinping agreed to designate it a controlled substance in China, with its sales subject to the maximum penalty under law.
In the meantime, both sides will continue to negotiate items like China's forced technology transfer of U.S. companies, nontariff trade barriers and cyberintrusions until March when, if no progress has been made, U.S. tariffs on $200 billion worth of Chinese goods are scheduled to increase from 10 to 25 percent.
Rob Schmitz, NPR News, Shanghai. Transcript provided by NPR, Copyright NPR.