Global Markets Rally After Trump-Xi Cease-Fire Eases Trade Worries

China President Xi Jinping and US President Donald Trump at a dinner at the end of the G20 Leaders Summit in Buenos Aires

The breakthrough came after a dinner meeting between President Donald Trump and Chinese leader Xi Jinping at the Group of 20 summit in Buenos Aires.

As a political scientist following the escalating tensions, I believe that the statements coming out of the G-20 meeting reveal that a wide gap still separates Xi and Trump, both in terms of what matters most to them and their approach to getting it. China will immediately state buying US agricultural products. "Very good things will happen", Trump tweeted on Monday.

- The United States and China reached a 90-day cease-fire in a trade dispute that has rattled financial markets and threatened world economic growth.

The US firm has said it will cut prices to absorb more of the tariffs and is building a local plant in Shanghai.

'Farmers will be a a very BIG and FAST beneficiary of our deal with China. The fact that China made no mention of agriculture in its statement after the meeting may also increase trader concerns over whether these purchases will materialize. We make the finest and cleanest product in the World, and that is what China wants. "Farmers, I LOVE YOU!" the U.S. president tweeted.

Trump tweeted late Sunday that 'China has agreed to reduce and remove tariffs on cars coming into China from the U.S. now the tariff is 40%.' There was no Chinese announcement about possible tariff cuts, and the Ministry of Commerce in Beijing didn't immediately respond to questions.

"The result is better than the market expected, but the huge divide remaining continues to suggest a bumpy ride ahead", said Citigroup China economist Li-Gang Liu, pointing to differences in the Chinese and USA accounts of the deal.

As Trump economic advisor Larry Kudlow said in Washington 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".

More news: Oil Prices Rally As Russia May Be Joining The Cuts

Trump, at his political rallies and news conferences, often praises the increase in US military spending during his almost two years in the White House.

The US president added that he was certain of starting a meaningful dialogue with President Xi and President Vladimir Putin of Russain on bringing a halt to the uncontrollable arms race. Beijing will no doubt attempt to make good on its pledge to increase purchases of USA goods, turning probably to soybeans and potentially energy.

US President Donald Trump and Chinese President Xi Jinping held talks in Argentina in an attempt to thaw the trade war between their countries that has rumbled on throughout 2018. Trump left immediately to board Air Force One for Washington, having spent two days attending the summit of G20 countries.

In a meeting lasting two and a half hours, the United States agreed not to raise tariffs further on January 1, while China agreed to purchase agricultural products from US farmers immediately.

While Washington touted the immediate increase in Chinese purchases of U.S. agricultural products, Beijing's statement was much more open, with no reference to immediate or agricultural products.

Trump and Xi will "immediately" begin talks on "structural changes" affecting forced technology transfer, intellectual property protection and cyber theft, it added.

"There was a significant commitment from both leaders on what needs to be done over the 90 days and instructions to both teams to negotiate and turn this into a real agreement with specific action items, deliverables and time frames", Mnuchin said. However, if the negotiations fail to bear fruit in the next 90 days, tariffs would be raised to 25 percent.

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