US, China agree not to raise tariffs on Chinese goods

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

By agreeing to a 90-day ceasefire and freezing new White House-planned tariffs to allow for a series of talks to take place on a range of key issues, the early foundations of a deal have been laid.

President Trump left the Group of 20 summit in Argentina with an agreement not to raise tariffs on Chinese goods in the next 90 days, the White House said. "This is the first time that we have a commitment from them that this will be a real agreement". The two heads of state reached consensus to halt the mutual increase of new tariffs, ' Wang said. "As that picture is getting bigger, we can accept those differences while acknowledging them peacefully, and be more active and open-minded in solving problems through interaction".

ANALYST'S TAKE: "Markets are reflecting a fragile truce between the USA and China after an initial sigh of relief".

He said for the first time there was "a clear path" to reduce the United States trade deficit with China to zero.

Announcing USMCA in October, Trump called it "the most important trade deal we've ever made by far". But as trade lawyer and Cato Institute scholar Scott Lincicome points out, "with no joint statement and list of actual/concrete deliverables, how will both sides (and the public) measure success or failure in 90 days?"

Trump tweeted on Monday that his meeting with President Xi was "extraordinary", and that "very good things" will happen in terms of the United States' relationship with China. "But the details of that still need to be negotiated", Mnuchin told CNBC.

In a surprise announcement tweeted Sunday night, Trump also said China would "reduce and remove" tariffs of 40 percent on cars, though Beijing has yet to confirm the move.

Chinese state media on Monday cautiously welcomed the trade war truce on Monday, without mentioning the US January 1 deadline.

China had previously offered to increase its purchases of U.S. products, only to have Mr Trump reject the deal. "Farmers, I LOVE YOU!" the U.S. president tweeted.

President Trump's trade war with China is on hold.

"Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath while it waits to see if the series of constructive plans that are in the works can put bilateral relations back on a cooperative rather than confrontational track", it said.

He said under the deal China would buy a "tremendous amount of agricultural and other product" from the United States.

"Now, it's the holiday shopping season before Christmas". If US consumers feel the prices have gone up during this holiday shopping season [because of higher tariffs], they could have different opinions in future elections. Einar Tangen, a political analyst and investment banker based in Beijing says that the truce was "an excellent outcome", given the threats of escalation in months preceding the meeting.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.