Published: Wed, December 05, 2018
Money | By Ethel Goodwin

Soybeans Lead Gains in Agriculture on U.S.-China Trade Truce

Soybeans Lead Gains in Agriculture on U.S.-China Trade Truce

Steven Mnuchin, the Treasury secretary, said that China had agreed to buy US$1.2 trillion of American products, but he could not offer specifics.

But any such pact is not a guarantee, given deep divisions that remain between the countries and the administration's insistence that China end its practice of pressuring USA companies to hand over valuable technology and trade secrets.

The White House's official statement says nothing of the sort; it only says the US will hold negotiations with China on the latter's "forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture".

Mr Trump has said China is supposed to start buying agricultural products immediately and cut its 40 per cent tariffs on U.S. vehicle imports.

Over the weekend, Trump had boasted that he had reached a deal with China's President Xi Jinping, although details remained unclear into late Tuesday.

The president's Treasury secretary, Steven Mnuchin, told reporters Monday that there will be "specific changes right away" to help the agricultural industry, even as the majority of the tentative agreement remains to be worked out over a 90-day-period agreed upon between the USA and China.

The 90-day truce in the escalating trade war between the US and China came during a dinner meeting between the two presidents following the G-20 summit of the world's biggest economies in Buenos Aires.

As White House officials fanned out to talk up what U.S. President Donald Trump called "an incredible deal" with China to hit pause in their trade war, Beijing has said little on a pact that cheered markets but left many questions unanswered.

The US trade deficit with China was Dollars 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.

Trump said China had committed to buying large amounts of US agricultural products and completely removing all tariffs on US automobiles a huge shift from its current 40 per cent penalty although China hasn't confirmed this
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Trump agreed he will leave the tariffs on $200 billion worth of Chinese products at 10 percent, and not raise it to 25 percent as he has threatened to do January 1, according to a White House statement.

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To be sure, many tech-savvy Chinese were aware of the news, with some expressing unhappiness online about a lack of detail from state media.

Trump's economic team has spun his knee-jerk protectionism as a tactic created to negotiate "better" trade deals - but so far, those better trade deals don't seem to be stronger than the status quo ante.

Already there was confusion over when the 90-day period would start.

Beijing, for example, didn't mention the 90-day deadline for talks on a deal over technology issues. Trump named U.S. Trade Representative Robert Lighthizer to lead the talks with Beijing.

Wang added that the two also agreed to open markets to each other, and that China will work to gradually resolve United States concerns in the process of further opening-up.

China has also agreed to buy an unspecified but a substantial amount of domestic products to help narrow the trade deficit the United States has with China.

Also contributing to the decline are increased fears about future US economic growth. "Bob Lighthizer will be working closely with Steve Mnuchin, Larry Kudlow, Wilbur Ross and Peter Navarro. on seeing whether or not a REAL deal with China is actually possible", Trump wrote in part of a four-tweet message.

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