China trade truce seen boosting US stock market

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Trump said in exchange for the pause, China intends "to start purchasing agricultural product immediately" after saying in a late Sunday night tweet that Beijing "agreed to reduce and remove" a 40 percent tariff on us vehicle imports.

Trump expressed optimism that, based on his and Xi's friendship, the two sides would be able to hammer out an agreement that would prevent US tariffs on Chinese imports from a scheduled increase in January.

According to a statement from the White House, China will purchase a "very substantial" amount of agricultural, energy, industrial, and other products to reduce the bilateral trade imbalance.

But the language used in the Trump administration's announcement of the deal was very different to that in Chinese government statements, especially on Beijing's promises to buy more U.S. goods and the possibility of removing existing tariffs.

The statement said that the countries agreed to implement this transaction within the next 90 days.

President Trump left the Group of 20 summit in Argentina with an agreement not to raise tariffs on Chinese goods in the next 90 days, the White House said. "They intend to start purchasing agricultural product immediately".

President Donald Trump's Monday morning tweet about the trade deal with China stands in sharp contrast to what's being reported on China's media.

"I believe Trump took advice from his advisers because the Republican Party did not perform very well during the U.S. midterm elections in the agriculture-dependent states".

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The US trade deficit with China was US$335 billion past year and many manufacturers rely on inputs from the world's number two economy, so eliminating the deficit would be an extraordinary goal.

National Economic Council Director Larry Kudlow said he, Mnuchin and U.S. Trade Representative Robert Lighthizer had lunch with China's vice premier in Argentina and he told them that Beijing would move immediately on the new commitments.

While he praised the meeting as "highly successful" and a "great honor" to be working with Xi, Trump would only say that tariff increases are on hold for now. "I believe Trump wants all this to be settled and avoid any possible impact on his chances in future elections", he said. "China, right now, has major trade barriers-they're major tariffs-and also major non-tariff barriers, which are brutal".

USA companies and consumers are bearing part of the cost of the United States tariffs on China by paying higher prices for goods, and many companies have hiked prices on imported goods.

Trump made the announcement in a tweet late Sunday in the United States, saying Beijing will "reduce and remove" the tariffs, which now stand at 40%.

Prior to having dinner with Trump, Xi said he was "very happy" to have an opportunity to address issues with the United States leader.

The White House made clear that the 10 percent tariffs would still leap up to 25 percent if China doesn't meet U.S. demands in 90 days. The same goes for Trump who is under pressure from USA lobby groups, who have pointed out that higher tariffs would mean higher costs for American manufacturers, leading to higher prices for United States consumers.