US and China agree trade war detente!

Donald Trump and Xi Jinping attend a working dinner after the G20 leaders summit in Buenos Aires.

• The White House postpones for 90 days a planned increase of US tariffs on Chinese goods, while China pledges to take in more US imports.

Donald Trump and Xi Jinping each got something out of hitting pause on a trade war that threatens both of their economies, but analysts stressed that the tenuous truce does little to address the core sticking points of their economic rivalry.

The White House said it would postpone for 90 days a planned increase of US tariffs on Chinese goods, while China pledged to take in more US imports.

The steps temporarily pause an escalating confrontation between the world's two largest economies that has rattled world markets. Trump agreed to hold off on plans to raise tariffs from January 1 on $200 billion in Chinese goods. The Chinese agreed to buy a "not yet agreed upon, but very substantial amount of agricultural, energy, industrial" and other products from the United States to reduce America's huge trade deficit with China, the White House said.

The truce, reached after a dinner of more than two hours, buys time for the two countries to work out their differences in a dispute over Beijing's aggressive drive to supplant US technological dominance.

Trump has imposed import taxes on $250 billion in Chinese products - 25 per cent on $50 billion worth and 10 per cent on the other $200 billion. Trump had planned to raise the tariffs on the $200 billion to 25 per cent if he couldn't get a deal with Xi.

China has already slapped tariffs on $110 billion in US goods.

"It's an incredible deal," Trump told reporters aboard Air Force One. "What I'll be doing is holding back on tariffs. China will be opening up, China will be getting rid of tariffs. China will be buying massive amounts of products from us."

In a long-sought concession to the US, China agreed to label fentanyl, the deadly synthetic opioid responsible for tens of thousands of American drug deaths annually, as a controlled substance. And Beijing agreed to reconsider a takeover by US chipmaker Qualcomm that it had previously blocked.

"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," it said.

"China has agreed to start purchasing agricultural product from our farmers immediately."

The two leaders also agreed to immediately start talks on structural changes with respect to forced technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, the White House said.

Both countries agreed they will try to have this "transaction" completed within the next 90 days, but if this does not happen then the 10 per cent tariffs will be raised to 25 per cent, it added.

"It's great the two sides took advantage of this opportunity to call a truce," said Andy Rothman, investment strategist at Matthews Asia. "The two sides appear to have had a major change of heart to move away from confrontation toward engagement. This changes the tone and direction of the bilateral conversation."

The Chinese government's top diplomat, State Councillor Wang Yi, said the negotiations were conducted in a "friendly and candid atmosphere".

"The two presidents agreed that the two sides can and must get bilateral relations right," Wang told reporters, adding they agreed to further exchanges at appropriate times.

The pauses allows Xi to stave off an escalation of the pressure that higher tariffs would place on his country's slowing economy.

At the same time, Trump - stung by the US Democrats' congressional win in mid-term elections - can avoid further pain for agricultural US states whose exports of key crops like soybeans to China have been hit, said Beijing-based political consultant Hua Po.

"This was a rare opportunity for China because (the mid-terms) made Trump a lame president. So at this time it was acceptable for China to maintain some bottom lines while making concessions," Hua said.

But analysts said the two sides remain miles apart on key issues.

Trump may come under pressure once scrutiny of the cease-fire reveals that Xi got off "without yielding any meaningful concessions," said Brock Silvers, managing director of Shanghai-based investment advisory Kaiyuan Capital.

"The tensions have only been delayed, not resolved, and unless China quickly finds the political will to make a long-term peace via significant concessions on technology issues, this week's expected gains may prove to be temporary," he said.