OMAHA (DTN) -- Concluding the G20 Summit on Saturday, President Donald Trump announced his administration would hold off on higher tariffs against Chinese goods and that Chinese President Xi Jinping had agreed to immediately lift trade barriers on U.S. products, including agricultural products.
The White House issued a statement late Saturday detailing the "highly successful meeting" between Trump and Xi and their staffs in Buenos Aires, Argentina.
On trade, President Trump has agreed that he will not raise tariffs on Jan. 1, 2019, on $200 billion worth of product to 25%, but will leave the 10% rate in place.
The White House stated: "China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural products from our farmers immediately."
The agreement sets a short deadline of 90 days to come to some agreement on issues such as forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, the White House stated. If the two countries can't come to terms, the White House stated, the president will raise tariffs to 25%.
The statement from the Chinese government, reported by Xinhau news network, did not mention the U.S. tariff threats or the 90-day deadline. "The Chinese side said it will work to open its market, expand imports and resolve economy- and trade-related issues in China-U.S. relations in the process of a new round of reform and opening-up and in line with the needs of its domestic market and people."
China and the U.S. also agreed to jointly address the opioid crisis by designating fentanyl as a controlled substance, meaning that people selling fentanyl to the United States will be subject to China's maximum penalty under the law. The two countries also agreed to continue working together to denuclearize North Korea.
In a press gaggle aboard Air Force One, the president said: "It's an incredible deal. It goes down, certainly -- if it happens, it goes down as one of the largest deals ever made. It's a deal between the United States and China made by the President and the President. And it'll have an incredibly positive impact on farming, meaning agriculture, industrial products, computers -- every type of product."
Trump added that the U.S. would hold back on tariffs and China would open up its markets to more U.S. products.
"You know, China right now has major trade barriers -- they're major tariffs -- and also major non-tariff barriers, which are brutal," Trump said. "China will be getting rid of many of them. And China will be buying massive amounts of product from us, including agricultural from our farmers -- tremendous amount of agricultural and other products."
Agricultural exports to China have been hit hard by the tariffs. China imported $14 billion in soybeans alone from the U.S. in 2017, but in the current marketing year have bought just 2.2% of the volume purchased at the same period last year. Cotton purchases are less than half of what they were a year ago as well. Pork exports to China/Hong Kong, facing 62% retaliatory tariffs right now, are down 24% in volume and 18% in value over 2018 as well.
Following the signing Friday of the United States, Mexico, Canada Agreement, President Trump also said he would force Congress' hand on the new trade deal by terminating the North American Free Trade Agreement, which would expire six months after his termination notice.
"I'll be terminating it within a relatively short period of time. We get rid of NAFTA. It's been a disaster for the United States," Trump said. "That'll be terminated so Congress will have a choice of the USMCA or pre-NAFTA, which worked very well."
Agricultural groups on Friday issued news releases largely supporting the USMCA and called on Congress to approve the new trade deal. Little was said about what will happen with 25% tariffs on Canadian and Mexican steel and 10% tariffs on aluminum that prompted both countries to place retaliatory tariffs on several products, including U.S. agricultural exports such as dairy and grains.
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
© Copyright 2018 DTN/The Progressive Farmer. All rights reserved.