Meeting at the G20 Summit on Saturday, 1 December in Buenos Aires, Argentina, Chinese President Xi Jinping and U.S. President Donald Trump agreed to a détente in their trade war.
In an announcement after the meeting, the White House said Trump had agreed to postpone his plan to ramp up existing 10 percent tariffs on USD 200 billion (EUR 170 billion) of Chinese goods to a 25 percent rate on 1 January, 2019. That move is contingent upon China and the United States coming to terms on a broad collection of disagreements – including intellectual property protection and forced technology transfer and a widening trade deficit – that set the trade war in motion in January 2018.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” Trump said in a statement.
As part of the agreement to stall increases in U.S. tariffs, the Chinese agreed to purchase a “very substantial” amount of U.S. industrial, energy, and agricultural products, the White House said in its statement.
Chinese Foreign Minister Wang Yi told reporters after the conclusion of the meeting that the truce allowed for "new space for win-win co-operation.”
“The principal agreement has effectively prevented further expansion of economic friction between the two countries,” Wang said, according to the BBC.
The trade war has significantly impacted the seafood industry, with China listing 170 seafood products subject to new tariffs on 6 July, and the U.S. responding by adding hundreds of seafood items, including many categories of shrimp, tilapia, salmon, pollock, tuna, flatfish, crab, scallops, squid, and fishmeal, in its own tariffs less than a week later.
John Connelly, the president of the U.S. seafood trade group the National Fisheries Institute, said his organization welcomed the temporary suspension of tariff increases.
“Seafood exports to China and seafood imports from China both play and important role in growing and maintaining U.S. jobs. The growing middle class in China is an important export market for U.S. seafood products. At the same time, raw material from China fuels production of finished seafood products here. When it comes to seafood, the relationship between the U.S. and China has historically been symbiotic. Tariffs damage that partnership,” he said. “Certainty in supply is key to the seafood community on both sides. Even a pause in trade hostilities can help return a degree of confidence to the market.”
Connelly said he would have liked to see a reduction in existing tariffs, but that he was encouraged by the commitment by both sides to continued negotiations.
“The latest assurance from the [Trump] administration that both sides are actively engaged in working towards a solution is beneficial to managing, maintaining, and growing seafood businesses. Whether it's imports or exports the jobs impacted are here in the U.S,” he said. “NFI is pleased with this progress but would additionally like to have seen a commitment from China to pause or reduce the 25 percent tariffs they have already placed on U.S. seafood exports. We’re hopeful these latest developments will lead to a long-term solution.”
However, the U.S. and China may find itself in an even more difficult position in coming months due to the short timeframe for negotiating a compromise, according to Dutch bank ING, which issued a public note on Sunday, according to CNBC. Realistically, a trade deal that addresses all U.S. complaints would take years to iron out, the note said.
"90 days to work out a broad agreement is very short,” the note said. “Especially because the agreement should also encompass a deal on more sensitive issues like the theft of intellectual property and forced technology transfers in joint ventures. Most wide-ranging bilateral trade agreements take years to negotiate."
Photo courtesy of G20
