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Trump, China’s Xi Agree to End Trade and Tariff Standoff

Lawmakers have been split on how tough Trump should be on Beijing

Chinese President Xi Jinping arrives at the Capitol in September 2015. He and President Trump agreed to a trade cease-fire Saturday after months of tensions. (Bill Clark/CQ Roll Call file photo)
Chinese President Xi Jinping arrives at the Capitol in September 2015. He and President Trump agreed to a trade cease-fire Saturday after months of tensions. (Bill Clark/CQ Roll Call file photo)

President Donald Trump and Chinese President Xi Jinping on Saturday agreed to what amounts to a cease-fire on a monthslong trade tiff.

“President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent at this time,” White House Press Secretary Sarah Huckabee Sanders said in a statement.

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately,” Sanders said.

The two leaders also “agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. 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 percent tariffs will be raised to 25 percent,” she said.

After months of tariffs and tensions, Saturday’s agreement hands Trump his second political victory in as many days. On Friday, on the sidelines of the G-20 summit in Argentina, he and his Mexican and Canadian counterparts signed an agreement that, if approved by Congress, would replace the North American Free Trade Agreement.

On Friday, the U.S. leader and his Canadian and Mexican counterparts signed a new trade pact White House aides for months have had little more than frustrated shrugs to offer when asked if staff-level talks with Chinese government officials had produced any progress in trade talks that stalled almost a year ago. As recently as Tuesday, some of Trump’s top aides advised against expecting that a Trump-Xi dinner in Argentina would produce a deal.

The most White House national security adviser John Bolton would say was that the two presidents would break bread “not with the expectation that, at this meeting, there’ll be some substantial agreement coming out of it.” Rather, the White House’s goal was “that there would be an indication, a kind of way ahead that the advisors could then pursue,” Bolton said.

But by Friday, his boss struck a more optimistic tone amid turmoil back home.

[Trump Gets Needed Win With Trade Pact, But Fight With Congress Looms]

“If we could make a deal, that would be good. I think they want to, and I think we’d like to. And we’ll see,” Trump told a reporter in the Argentine capital, Buenos Aires. “There’s some good signs. We’ll see what happens.”

Those comments came a day after special counsel Robert S. Mueller III revealed a new plea deal with Michael Cohen, Trump’s former lawyer and “fixer.” Cohen admitted to lying to Congress about the scope and timetable of his former boss’s efforts to build a tower in Moscow. Court documents filed Thursday show Cohen worked on the project longer than he told congressional investigators — well into Trump’s 2016 presidential candidacy.

Watch: Trump Blasts Former Fixer Michael Cohen

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The documents show Cohen was in contact with a senior Kremlin official about garnering the help of Russian President Vladimir Putin and ceased work on the project around the time of the June 9, 2016 Trump Tower meeting in New York that included Donald Trump Jr. and a Russian lawyer promising dirt on Hillary Clinton.

Trump might have pressed Xi for a deal and been more willing to bend to some of Xi’s demands to net another trade win in an attempt to offset any political damage back home. 

Home critics

Some lawmakers have criticized Trump for his tough trade talk and actions toward China, including his tariffs and threats of imposing up to $256 billion more in such sanctions if no deal could be reached.

“President Trump is right to have zeroed in on China’s unfair trade practices, but a trade war with China isn’t good for the world’s economy over the long term, and it’s not good for the U.S. economy either,” Delaware Sen. Chris Coons, who serves on the Foreign Relations Committee, said this week.

Politically, even if the details of what the two leaders agreed to remain murky, the president is returning to Washington one step closer to a new North American trade pact and at least a Chinese commitment for a deal between the world’s largest economies.

But other lawmakers sounded alarms as Trump headed for the G-20 summit, warning him to resist the benefits of what they are concerned might be a “meaningless” pact with Xi.

[Trumps, Shunned by McCain, Will Attend George H.W. Bush’s State Funeral]

“We have seen disturbing reports that you may be considering backing down on further action against China in order to reach an agreement at the G-20. We urge you to stand firm against China if meaningful concessions are not made. American jobs, American innovation, and long-term American economic prosperity are at stake,” Senate Minority Leader Charles E. Schumer, Oregon Sen. Ron Wyden and Ohio Sen. Sherrod Brown wrote to the president this week.

“While we hope that talks with China will achieve meaningful results for U.S. workers, we urge you to not back down for the sake of a weak and meaningless agreement should China fail to make real concessions,” the Democrats wrote.

Matthew Goodman, who oversaw Asia-Pacific economic issues for the Obama White House, said both Trump and Xi likely were feeling pressure to reach some agreement.

For the U.S. leader, a recent stock market slide — even though it bounced back late in the week — has many financial experts warning of a recession. And for the Chinese president, “growth is slowing and I think there’s an interest in trying to get this behind them,” Goodman said of the tariff battle with Trump.

But even before the Mueller drama, another White House aide had left open the door that something might start to come together during the high-stakes dinner.

Chief economic adviser Lawrence Kudlow was asked why he remained somewhat optimistic about a deal during a Tuesday morning session with a group of reporters. He replied, referring to Trump, “Because of the president.”

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