Asia markets rise after U.S. and China agree to trade truce

China President Xi Jinping and US President Donald Trump at a dinner at the end of the G20 Leaders Summit in Buenos Aires

China President Xi Jinping and US President Donald Trump at a dinner at the end of the G20 Leaders Summit in Buenos Aires

The meeting, brought forward by an hour from its original time, may have been tacked on to the end of two days of G20 diplomacy, but it was in many ways the main event of the weekend.

Kim Ji-yeon zooms in on the issue. Trump told reporters in the room that he would raise his concerns that China isn't doing enough to halt the flow into the USA of fentanyl and related chemicals.

Trump tweeted late Sunday that 'China has agreed to reduce and remove tariffs on cars coming into China from the U.S. now the tariff is 40%.' There was no Chinese announcement about possible tariff cuts, and the Ministry of Commerce in Beijing didn't immediately respond to questions.

U.S. President Donald Trump predicted Monday "very good things will happen" in a U.S.

US President Donald Trump imposed a 10 percent tariff on $200 billion (£153 billion) worth of Chinese goods in September.

The two sides also agreed to start discussions on other contentious issues, including intellectual property protection, non-tariff trade barriers and cyber theft.

However, concerns are still hovering over the notion on how the two biggest economies will iron out their differences. including ways to narrow their trade imbalance, as they are already presenting different renderings of their agreement.

Analysts at Danske Bank suggest that markets in Asia were buoyed by the trade agreement between the U.S. and China at this weekend's G20 meeting as the agreement between the USA and China provided a 90-day truce allowing for negotiations on a permanent trade deal.

Chinese state media gave a cautious welcome on Monday to the trade war truce.

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Kim Ji-yeon, Arirang News.

The United States had a $335.4 billion trade deficit with China in 2017.

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. One of Trump's stated aims was reducing the US trade deficit with China, but the dispute has widened it, partly because China stopped buying commodities. It is also possible that China will tone down specific targets on market share and domestic content in its Made in China 2025 plan, while agreeing to reduce subsidies to SOEs in related sectors.

"President Xi and Vice Premier Liu He said to us their commitments will begin immediately", Kudlow told FOX Business' Stuart Varney on Monday. It didn't mention the 90-day deadline, nor any agreement to step up agricultural or other commodity imports. Trump said, however, "We are dealing from great strength, but China likewise has much to gain if and when a deal is completed". As we wrote in the Global Outlook, we see asymmetric risks around tariff policy.

Tensions rose in May when the United States administration said it would levy extra taxes on $50 billion worth of Chinese goods, bringing that figure up to $250 billion over the next few months.

"Farmers will be a very BIG and FAST beneficiary of our deal with China".

US officials will monitor Chinese progress on enforcing the commitments very closely, Kudlow said.

He also said that he was open to ratifying the previously unapproved Qualcomm-NXP deal should it be presented to him once again.

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". China imported 280,208 vehicles, or 10 percent of total imported cars, from the US last year, according to China's Passenger Car Association.

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