1. On Saturday, the United States and China called a truce on their trade war. On the U.S. side, President Trump agreed to hold off on introducing new tariffs. On the Chinese side, President Xi Jinping promised to increase purchases of American products.
2. Specifically, Trump is postponing his plan to raise tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent. Trump initially wanted this policy to start on January 1. China agreed to increase industrial, energy, and agricultural purchases in return.
3. Despite the immediate resolution, the two presidents are still deeply divided on their trade theories and policies, as well as ideas on market access. Both sides seem unwilling to back down on certain issues but plan to meet for further negotiations. Trump said he would still increase tariffs if the two countries don’t reach a border trade agreement in the next 90 days — an ambitious goal for a relatively short amount of time.
4. For now, this meeting “pauses what was becoming a headlong race toward economic conflict.” Economists think it will “reassure jittery financial markets, as well as American farmers, who worried about the fallout from a prolonged trade battle.”