Trump and Xi serve up trade war truce comfort food

TRADE WAR: Europe and Asia stock markets higher as China and US agree CEASEFIRE

Stock markets in Asia and Europe jumped sharply after Trump and Xi, as leaders of the world's two biggest economies, agreed Saturday in Argentina to not impose any new tariffs on each other's exports for the next 90 days while they negotiate a detailed trade agreement.

Mr Trump's tweet did not give any further detail about the tariff cuts, such as when the deal had been reached or a new level for the Chinese levies.

The tweets come as the president said China would commit to removing heavy auto tariffs on US made cars.

Over the weekend, President Trump of the United States and President Xi Jinping reached a consensus in the ongoing battle between the world's two largest economies over a two and half hour working dinner after hailing their close friendship.

US-made vehicle brands like Tesla Inc and Ford Motor Co's Lincoln were at a major disadvantage as the move came soon after China slashed auto import tariffs for the wider market to 15 percent from 25 percent.

Resolving the tariff war between the US and China is seen as crucial for American agriculture, particularly soybeans, America's largest export to China, which accounted for $12.4 billion in sales previous year. However, tariffs on US$200 billion worth of goods were previously set to increase from 10 percent to 25 percent from January 1, 2019.

The deal means the U.S.is unlikely to match China's 40-percent duties on light vehicles built in the US, a move the American government has considered in recent weeks. Neither country had mentioned auto tariffs in their official read-outs of the Trump-Xi meeting.

China will agree to purchase a not yet finalized but very substantial amount of agricultural, energy, industrial, and other products from the United States to reduce the imbalance.

Hopes of a breakthrough at the G20 had been undermined right before the meeting by comments from the USA president.

What happens if there's no deal after 90 days? By midyear, soybean exports to China were down by 20.5%, according to CNBC.

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The benchmark Shanghai Composite index led the way with a rise of 2.6% while Hong Kong was up 2.3% and Tokyo 1% better.

The White House announced it wouldn't raise the 10 percent tariffs to 25 percent, instead giving the two countries 90 days to talk out their problems.

Trump, at his political rallies and news conferences, often praises the increase in US military spending during his almost two years in the White House.

The president also touted an agreement with China to reduce tariffs on cars entering China from the United States.

Speaking to reporters aboard Air Force One on Saturday, Trump said, "It's an incredible deal".

The trade war has taken a toll on vehicle companies that manufacture in the US, with the makers of Mercedes-Benz and its rival BMW both warning of lower profits this year as tariffs forced them to hike prices in China.

"As far as we can tell, there are big discrepancies between both sides' statements", he said in a research note.

Farmers sold $19.6 billion in products to China past year, according to the Farm Credit Administration Office of Regulatory Policy.

Wang Cun, director of the China Automobile Dealers Association's import committee, told reporters in Beijing: "If they cancel the extra 25 percent tariff on US-made cars, then we will see positive signs for imported cars".

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