Asia markets rise after U.S. and China agree to trade truce

USA and China stopped their war for three months

TRADE WAR: Europe and Asia stock markets higher as China and US agree CEASEFIRE

The announcement came from Trump's twitter account after revealing that China had allegedly agreed to "reduce and remove" tariffs on U.S. cars, which is now set at 40%.

China's statement also placed greater emphasis on economic cooperation and restoring diplomatic relations, the kind of high-minded talk that for decades has been more typical of American presidents.

Asian markets rallied after news of the trade war truce.

However, while the agreement provides breathing room for the US and China - and the global trading system as a whole - a final resolution to the US-China trade war remains far from certain.

The United States has slapped 25 percent tariffs on another $50 billion worth of Chinese imports and they remain in effect despite the truce. Existing tariffs, however, will stay in place.

Under the agreement, Trump is shelving a plan to raise tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent from the start of next year - but the hike will kick in if negotiators fail to reach a final deal within 90 days.

The White House called the meeting "highly successful", saying the US will leave existing tariffs on $200 billion of Chinese goods at 10 percent and refrain from raising that rate to 25 percent as planned on January 1.

This saw China retaliate with 10 percent tariffs on $60 billion (£46 billion) of USA imports.

In China, tariffs have also weighed on the economy.

The agreement so far lacks detail, but allows the USA and China an additional 90 days to negotiate an agreement.

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It would also be good news for Tesla, which has been hit hard by increased tariffs on the electric cars it imports to China.

In order to secure the 90-day ceasefire from the US, China agreed to a number of additional commitments.

In return, China is to purchase "very substantial" amount of agricultural, energy, industrial and other product from the US. "I don't agree with that", he said.

The White House statement also said that Xi is open to approving the U.S. chipmaker Qualcomm's purchase of Dutch semiconductor company NXP. China imported 280,208 vehicles, or 10 per cent of total imported cars, from the USA last year, according to China's Passenger Car Association.

Unrelated directly to trade, China has agreed to crack down on the production and distribution of Fentanyl. Ford decided not to import a crossover-ized Focus from China, Volvo began sourcing the XC60 from Sweden rather than from China, Buick considered canceling the American-spec Envision, and Cadillac stopped selling the hybrid CT6 it builds on the outskirts of Shanghai.

The move, if confirmed, would be welcomed by a vehicle industry unsettled by the escalating US-China trade war.

The Global Times said the two sides would discuss expanding market access, protecting intellectual property and "joint control of cyber crime".

He continued: "Companies have recently pointed to tariffs (and trade more generally) as the primary reason for a recent slowdown in demand".

The BBC's Stephen McDonell reports that China "has pretty much given up nothing in this deal because the future tariffs threatened from the Beijing side were retaliatory in nature and only to be applied if the United State escalated".

The Communist Party's official mouthpiece, the People's Daily, described the announcement as an "important consensus" that shows the two countries" common interests "outweigh differences'.

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