The Chinese and American Presidents Xi Jinping and Donald Trump agreed at a dinner following the G20 Leaders’ Summit in Buenos Aires, Argentina, to call a truce in the trade war between their two countries. The U.S. agreed not to raise tariffs from 10% to 25% on USD200 billion of Chinese imports on January 1 as originally planned but will wait 90 days to allow for negotiations to continue to remove existing tariffs on each other’s products, marking a significant de-escalation in trade tensions between the world’s two biggest economies. Chinese State Councilor and Foreign Minister Wang Yi said that China agreed to buy more from the U.S. to address the bilateral trade imbalance. The amount of the purchases has not yet been agreed upon, but they would be very substantial, and include agricultural, energy, industrial, and other products from the U.S. China would also buy agricultural products from U.S. farmers immediately.

Both countries agreed to open their markets further and China agreed to address the legitimate concerns of U.S. businesses. The dinner discussion lasted an hour longer than expected. Both sides appeared satisfied at the end of the gathering, with applause heard in the room as the dinner drew to a close. White House Economic Adviser Larry Kudlow told reporters that the talks went “very well”.

Before the start of the dinner, President Xi had said that he was very happy to meet with President Trump. “Since the last meeting, there have been many new changes in the world situation. As two big countries, China and the United States have important influences and share important responsibilities in promoting world peace and prosperity. Cooperation is the best choice for both sides. I would like to take advantage of the opportunity tonight to exchange views with the President on issues of common concern and plan for the next phase of Sino-U.S. relations,” Xi said. President Trump said that his relationship with Xi was “very special”. “I think that is going to be a very primary reason why we’ll probably end up – ending up getting something that will be good for China and good for the United States,” Trump said.

The participants finished their meeting with a group photo that included both teams, underscoring a sense of cohesion that contrasted with the acrimony between the two sides since the bilateral trade war started. After the U.S. imposed 10% tariffs on USD200 billion worth of Chinese products in late September, China responded by slapping duties ranging from 5% to 10% on USD60 billion worth of American imports. Previously, the U.S. had imposed 25% tariffs on USD50 billion worth of Chinese imports in July and August, and China retaliated in a tit-for-tat manner by levying the same tariff rate on the same amount of U.S. products. Trump imposed the tariffs not only to force Beijing to take measures to close a decades-old U.S. trade deficit with China but to give U.S. companies easier access to Chinese markets. China’s trade surplus hit a record USD375 billion last year and amounted to USD261 billion in the first eight months of 2018, according to U.S. government data, the South China Morning Post reports.

The G20 meeting was the leaders’ first since the trade war began. With Trump at the dinner were Secretary of State Mike Pompeo, Treasury Secretary Steven Mnuchin, White House Chief of Staff John Kelly, Trade Representative Robert Lighthizer, National Security Adviser John Bolton, Trump Adviser and son-in-law Jared Kushner, Economic Adviser Larry Kudlow, Chief Trade Adviser Peter Navarro and Matt Pottinger, the Senior Director for Asian Affairs on the National Security Council. The Chinese delegation included Ding Xuexiang, Director of the General Office of the Communist Party’s Central Committee; Vice Premier Liu He; Yang Jiechi, Director of the Secretariat of the Communist Party’s Central Leading Group on Foreign Affairs; Wang Yi, State Councillor and Foreign Minister; He Lifeng, Chairman of the National Development and Reform Commission (NDRC); Commerce Minister Zhong Shan; Cui Tiankai, Chinese Ambassador to the U.S., and Wang Shouwen, Vice Minister of Commerce.

U.S. President Donald Trump tweeted after his departure that China had agreed to reduce and ultimately remove tariffs on U.S. cars imported into China, which currently stands at 40%. A White House statement said both sides would immediately begin negotiations on a wide range of issues, including forced technology transfers, intellectual property protection, non-tariff barriers and cyber intrusions. But if the two sides cannot reach agreement over these matters within the next 90 days, the U.S. will again raise tariffs. The two Presidents also agreed to exchange visits at an appropriate time.