U.S. President Donald Trump and Chinese President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement. The truce between the U.S. and China emerged after a highly anticipated dinner Saturday between Trump and Xi on the sidelines of the Group of 20 summit in Argentina. The leaders agreed to pause the introduction of new tariffs and intensify their trade talks, Chinese Foreign Minister Wang Yi told reporters hours later in Buenos Aires. The White House called the meeting “highly successful,” says the U.S. will leave existing tariffs on $200 billion (RMB 1.39 trillion) of Chinese goods at 10 percent and refrain from raising that rate to 25 percent as planned on Jan. 1. In exchange, the U.S. wants an immediate start to talks on Trump’s biggest complaints about Chinese trade practices: intellectual property theft, non-tariff barriers, and forced technology transfer.
Moreover, Xi told Trump “he is open to approving the previously unapproved Qualcomm-NXP deal should it again be presented to him,” White House Spokeswoman Sarah Huckabee Sanders said in the statement. Qualcomm scrapped its proposed $44 billion (RMB 306 billion) bid for rival chip-maker NXP in July after an almost two-year wait for approval, as tensions between the U.S. and China escalated. Chinese regulators declined to clear the deal, though the country later expressed regret over the transaction’s collapse. At the time, the abortive takeover was the highest-profile victim of a dispute between the world’s two largest economies about their ballooning trade imbalance, a spat fueled by concerns about China’s ascendancy. By allowing the Qualcomm deal to run itself out, Beijing was seen to be “flexing” its economic muscles while retaining negotiating power with a Trump administration that has threatened to slap tariffs on virtually all Chinese imports.