China has apparently bowed to economic pressures brought on by increased tariffs under the Trump administration.
In a closed-door dinner between Trump and Chinese leader Xi Jinping at the Group of 20 Summit in Buenos Aires, the two agreed to a pause in the current trade war. The trade dispute has left the Chinese economy in relative shambles while pushing the value of the American Dollar to record levels in the strongest economy in 50 years.
Economists say that the American economic engine continues to expand even while some goods are costing a bit more.
For China, however, the story is the opposite. Chinese exports have been falling in numerous areas, inflation is rampant, and the Communist regime will miss economic targets set for 2018–the first time in decades.
The 90-day pause in the dispute includes President Trump agreeing to hold off on additional tariffs on $200 billion in goods that were scheduled to take effect Jan. 1, while China has bowed to pressure after initially saying it would not be bullied into making any changes by Trump’s hard-line stance.
The United States under President Trump’s leading, has imposed import taxes on $250 billion in Chinese products — 25 percent on $50 billion worth and 10 percent on the other $200 billion. Trump had planned to raise the tariffs on the $200 billion to 25 percent if he couldn’t get a deal with Xi.
Now, the Communist nation will buy “a very substantial amount of agricultural, energy, industrial” and other products from the United States.
That was one of Trump’s signature negotiating points in his effort to reduce America’s huge trade deficit with China.
The agreement also has implications in America’s opioid crisis which President Trump is addressing with an aggressive plan to limit it at the source.
The Associated Press reports that, “in a long-sought concession to the U.S., China agreed to label fentanyl, the deadly synthetic opioid responsible for tens of thousands of American drug deaths annually, as a controlled substance.”
New opioid use in the United States has dropped by 50% since the president’s policies began to take effect in 2017.
The announcement of the agreement between the world’s two largest economies is seen as another victory for President Trump who continues to be criticized by liberals for his harsh negotiating tactics.
For the first time in modern history, China has now had no choice but to come to the table in trade negotiations because, observers say, the American administration has not flinched. The U.S. has made few if any, small concessions in the negotiating process. A first in negotiations with China.
The announcement comes as China continues to push for regional dominance in areas of the world previously thought off-limits to the communists in the modern era.
From Panama, to East Africa, China this year has been pouring hundreds of billions of dollars into infrastructure projects from railroads to highways to ports. Those projects are fueled to a large degree by purchases by Americans of cheap electronics, clothing and furniture–or just about anything seen on the shelves of American stores.
With China’s new budget crisis brought on by Trump’s policies, the communist nation’s outreach has been affected as cash reserves start to dwindle.