Trump and China Called a Truce in the Trade War. Now What?

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It made the announcement after US President Donald Trump met China's President Xi Jinping for the first time since a trade war erupted this year.

With the United States and China clashing over commerce, global financial markets next week will take their lead from the results of Saturday's talks between Trump and Xi, widely seen as the most important meeting of USA and Chinese leaders in years.

Meanwhile, the state-run China Daily said in the editorial that "the fact that the two leaders could sit down for candid talks and agree to avoid the looming escalation of trade tariffs to allow for continuing trade negotiations, shows that both sides are aware of how damaging they would be, not just on each other but the global economy as a whole".

They have also agreed to exchange visits at the appropriate time.

Trump a year ago declared the opioid crisis a public health emergency in the United States and brought up the issue with Xi when the two leaders met in Beijing in November 2017.

China's Vice Commerce Minister Wang Shouwen also said the two leaders had made a decision to not impose new tariffs on other products. If negotiations are successful, next year could bring relief in time for the President's 2020 re-election campaign.

- US President Donald Trump and his Chinese counterpart Xi Jinping had the future of their trade dispute - and broader rivalry between the world's two top economies - on the menu at a high-stakes dinner Saturday.

Earlier that day, Trump signed a revamped three-way trade deal with Canada and Mexico, fulfilling a longstanding pledge, though the agreement could face headwinds in Congress.

Most of those products are subject to a new 10% tariff, and Trump had threatened to raise that to 25% on January 1 if China doesn't open its markets further and stop stealing American technology. China has retaliated with tariffs on $110 billion worth of USA imports.

USA officials for years have been pressing the Chinese government to take a tougher stance against fentanyl, and most US supply of the drug is manufactured in China.

The Trump-Xi meeting was the marquee event of Trump's whirlwind two-day trip to Argentina for the G-20 summit after the president canceled a sit-down with Russian President Vladimir Putin over mounting tensions between Russia and Ukraine.

World leaders, including Trudeau and U.S. President Donald Trump, centre, get ready for a summit family photo in Buenos Aires on Friday. The deal amounts to a ceasefire in the series of escalating, tit-for-tat tariffs the US and China have imposed on each other's goods throughout the year.

Xi replied referencing the men's "personal friendship" and that they must cooperate for "world peace and prosperity". China also will make fentanyl, a deadly synthetic opioid, a controlled substance, the White House said.

Xi, according to the White House, also told Trump he is open to approving the previously unapproved $44 billion bid by American semiconductor and telecommunication equipment manufacturer Qualcomm to purchase Dutch semiconductor maker NXP should the deal again be presented to him.

"The world is undergoing a hard moment as Trump pursues a vision at odds with the idea of collective action on trade and climate change", EU President Donald Tusk said at the G20.

Trump also succeeded in having a statement about reforming the World Trade Organization included in the nonbinding statement. The presidents have come to an agreement on stopping the imposition of additional tariffs.

The US stance on trade and climate change already saw the G7 Summit and the Asia-Pacific Economic Forum end without routine statements.

Many in Europe have looked to Merkel as Trump has called into question traditional trans-Atlantic ties with his announcements of trade tariffs, repeated criticism of European contributions to NATO and other issues. China calls the United States protectionist and has resisted what it views as attempts to intimidate it.

This gives Xi leverage to wait Trump out and essentially dare him to raise tariffs further, knowing it would hurt the USA economy.