WATCH: Trump-Xi both get trade war wins with harder issues unresolved

Donald Trump and Xi Jinping emerged from their high-stakes dinner meeting in Argentina with a ceasefire agreement on tariffs that delivered enough for each to claim an initial win.

Xi won a temporary halt to additional trade hostilities against his nation’s slowing economy as the two presidents agreed to work toward a substantive agreement within 90 days.

Trump won agreement from China to boost its purchases of agricultural, industrial and energy products to reduce its bilateral trade surplus and to begin negotiations on thorny issues including forced technology transfers, intellectual property protection and cyber theft.

“Xi avoids a large trade shock at a time when China’s economy is slowing and gives the current shift toward more stimulus more time to get traction,” said Brad Setser, a former Treasury official and now a senior fellow at the Council on Foreign Relations in Washington. “Trump doesn’t give up much by a short pause and gets a chance to ship the soybean harvest to China while the negotiations are ongoing. The hard part is finding the basis for a real deal that settles the broader issues rather than agreeing on a pause.”

‘Highly Successful’

The White House called the meeting in Buenos Aires on the sidelines of the Group of 20 summit “highly successful,” saying the US will leave existing tariffs on $200 billion of Chinese goods at 10% and refrain from raising that rate to 25% as planned on January 1. China’s Foreign Minister Wang Yi said both sides believe the deal prevents further expansion of economic friction between the two countries.

There was no signed, detailed agreement though, and there’s much left much to do in the next 90 days on the thorny issue of China’s industrial policies, which many analysts fear may lead to a protracted cold war between the nations.

If there’s no agreement on those issues after 90 days, the US will raise tariffs on $200 billion of Chinese goods to 25%, White House Press Secretary Sarah Huckabee Sanders said in a statement.

No Reason to Celebrate

The ceasefire is welcome because it prevents the trade war from escalating and buys time for negotiation but there’s no reason to celebrate because the threat of new tariffs still hangs over China’s head, said Zhou Xiaoming, a former commerce ministry official and diplomat.

For now markets anxious to see trade hostilities ease get a temporary respite. That’s good news for the global economy and stock markets, especially in emerging markets, said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney.

While both Trump and Xi come out ahead for now by avoiding mutually damaging 25% tariffs in January, it’s hard to see what will change fundamentally after 90 days, said David Loevinger, a former China specialist at the US Treasury and now an analyst at fund manager TCW Group in Los Angeles.

“Growth is going to slow in both countries,” he said. “While it doesn’t remove the the sword of Damocles hanging over trade, having blinked tonight you’d have to guess that the US will blink again in March."

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