President Donald Trump and his Chinese counterpart, Xi Jinping, had a meeting in Argentina this week during which both sides agreed to suspend the escalating trade war in favor of a 90-day negotiation period. In some of the most startling proof yet that Trump’s widely-criticized trade pressure is paying off, China has already agreed to purchase a “very substantial” amount of energy, industrial, and agricultural product from the U.S. They have also agreed to begin negotiating on structural changes to the way they handle intellectual property, trade barriers, cyber intrusions, and more.
In return, Trump has agreed to suspend a planned hike of tariffs on Chinese goods. Instead of ramping up the tariffs to 25%, they will remain at the ten percent level until the negotiation period is over. If the two sides cannot agree on a new structural trade agreement by that time, the tariff hike will go back into effect.
“Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%,” said White House press secretary Sarah Sanders.
“This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi,” Trump said after the two leaders finished their dinner.
In addition to reconsidering certain changes in the trade relationship, China has also reportedly caved when it comes to fentanyl. The U.S. has been pressuring China to label the synthetic opioid a controlled substance for a long time; according to the White House, President Xi has finally agreed to do so. Additionally, China agreed to take a second look at a Qualcomm takeover that the government had originally blocked. Notably, there is no indication that the U.S. will be forced to give much, if any, ground in the upcoming negotiations. If that remains the case by the end of the 90-day period, this can only be considered a total validation of Trump’s approach.
Put another way: A whole lot of economists and political pundits – including no small number of Republicans – are going to owe the president an apology.
Not that Trump should hold his breath.