Trump Plays Nice With China At G20, Agrees To Ceasefire In War He Started

After months of turmoil for the global economy, the US President has offered a truce in his trade war with China.

“I think at some point we are going to end up doing something great for China and great for the United States," Donald Trump said at the G20 meeting this weekend.

He met Chinese president Xi Jinping in Buenos Aires for dinner, with talks lasting more than two hours.

Shortly after, the White House released a statement confirming a cease fire in the trade standoff, just one month before tariffs on Chinese imports were set to be hiked.

“President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time,” said White House Press Secretary, Sarah Huckabee Sanders.

The two presidents have agreed to try and change the trade system to better protect intellectual property, and China has agreed to buy more goods from the United States.

“Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent,” Huckabee Sanders said.

President Donald Trump with China's President Xi Jinping during their bilateral meeting at the G20 Summit (AP Photo/Pablo Martinez Monsivais)

Trump’s critics say he’s putting America first, at the expense of free and fair trade.

Australian Prime Minister Scott Morrison leapt to Donald Trump’s defence, backing his push to overhaul the way countries buy and sell goods.

“The allegations [of protectionism] that have been made against the United States, I don’t buy and what we are trying to achieve here is a modernising of the world’s trade system," he said.

The US-China trade war may sound like a foreign problem, but if it continues to escalate, it is estimated to cost up to 20,000 Australian jobs.

“The tensions between the G20 run very real risks for the global economy,” Morrison said.

World leaders at the G20 agreed to overhaul the World Trade Organization, which controls international buying and selling.

However, leaders' comments on trade in a written statement at the end of the summit were much weaker than last year, and did not include the words “fair” or “free".