G20: Trump and Xi to meet amid US-China trade tensions

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China, the world's largest auto market, raised tariffs on US auto imports to 40 percent in July, forcing many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the United States sent to China previous year.

The question now is what occurs in the next 90 days. China will be opening up, China will be getting rid of tariffs. Beijing will no doubt attempt to make good on its pledge to increase purchases of USA goods, turning probably to soybeans and potentially energy. The US has a 27.5 per cent tax on imported cars from China.

"However, the USA threatened that if no agreement is reached after this period, the 10% tariff rate on USD200bn worth of Chinese goods will be raised to 25%".

U.S. company Tesla saw its sales drop with the higher prices this fall and recently said it would absorb some of the higher tariff costs and no longer pass them on to consumers. So far, China has been unwilling to commit to long-term changes that address the Trump administration's concerns.

The White House said China was "open to approving the previously unapproved" deal for US company Qualcomm Inc to acquire Netherlands-based NXP Semiconductors "should it again be presented".

In return, China agreed to buy what the White House called a "not yet agreed upon, but very substantial" amount of USA products to help narrow America's gaping trade deficit with China.

In addition to the Dow, futures for the S&P 500 and the Nasdaq have also jumped significantly, with futures on oil and copper posting large increases as well on hopes a China-U.S. trade deal could boost global economic growth.

Xi appears to have offered up non-trade measures to build goodwill in the relationship at a time of multiple converging tensions, from the South China Sea to Taiwan.

The White House said that China has also agreed to step up purchases "immediately" of an unspecified amount of USA agricultural goods.

In exchange, China agreed it was willing to purchase a "very substantial" amount of agriculture, energy and other goods from the United States to help reduce the trade imbalance.

As Trump economic advisor Larry Kudlow said ahead of the dinner: "If things don't work out in this US-China summit meeting, he will invoke some 267 billion dollars in additional tariffs".

Zhang also noted that it remains unclear whether Washington and Beijing would be able to "come up with an agreement in 90 days". It also said China agreed to designate the synthetic opioid fentanyl, which has been linked to an epidemic of overdose deaths, as a controlled substance - a move that would expose its sellers to the maximum penalty under Chinese law. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.

Trump met with Xi in Argentina on Saturday in a bilateral during the G-20 summit.

It suggests that cooperation is the key to the solution of problems, said Zhu Feng, a professor with the School of International Studies at Peking University, adding that given the differences between China and the United States in institutions, industrial policies and markets, Xi and Trump have demonstrated strategic courage and resolution at the dinner table.

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"The United States, which is the most open economy in the world, does not accept being shackled", the summit's host, Argentinian President Mauricio Macri, told a news conference. "It is my great honor to be working with President Xi".

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