Xi, Trump reach important consensus, chart course for bilateral ties

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Hong Kong's Hang Seng dropped 0.5 per cent to 27,036.96 and the Shanghai Composite index was flat at 2,654.69.

Xi told Trump that only through cooperation could the United States and China serve the interest of peace and prosperity.

China is poised to start immediately purchasing more USA agricultural products, Trump said in a Monday tweet that China agreed to "reduce and remove" tariffs on imported American-made cars, an assertion that official in Beijing have refused to confirm. It's unlikely that a one-time boost in purchasing American exports will change that, and it's not at all clear that China will be able to pressure domestic businesses into making those purchases while the tariffs it erected against American farm products are still in place. For example, the Chinese statement (and official Chinese media) does not mention the 90-day deadline, only that tariffs will not be raised for the time being and that the two sides will negotiate. However, tariffs on US$200 billion worth of goods were previously set to increase from 10 percent to 25 percent from January 1, 2019.

Tweeting on Sunday night, Trump said: "China has agreed to reduce and remove tariffs on cars coming into China from the U.S. now the tariff is 40%".

In a briefing to reporters, he also said the USA did not yet have a "specific agreement" on auto tariffs. Both countries will accelerate negotiations with an aim of withdrawing all tariffs that were imposed and both countries would make mutual visits in due course. "We've never been close to this".

US markets soared on news of the detente with the Dow rising more than 400 points in Monday morning trading.

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If Chinese statements are anything to go by, Beijing is hoping this will be the beginning of the end for the Trump trade war. "I replied to his questions about the incident in the Black Sea", Putin said, after Russian Federation seized three Ukrainian vessels and their crews off Crimea. "Currently, the tariff is 40 per cent". "What I'd be doing is holding back on tariffs".

The financial market participates cheered the news by pushing equities higher all around the world.

However, analysts were much more cautious, saying it seemed unlikely a deal could be reached on such a rapid timeline and pointing to discrepancies in the claims of victory from Washington and Beijing.

"China will be buying massive amounts of product from us", Trump said after the talks. The truce in the trade war will offer a space for intense negotiations between the two giants to deal with the bilateral trade issues.

Aaron Friedberg, a Princeton University professor of politics and global affairs, told NBC News before the G-20 summit that such a temporary cease-fire - setting up a structure for further negotiations - was the likely outcome of the Trump-Xi talks. Trump agreed to hold off for the time being on any new tariffs, while his Chinese counterpart pledged to purchase more American goods.

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