US and China agreed to stop further escalation of trade war for the time being, after 80 meeting between Trump and Xi Jinping, as sideline of G20 summit in Japan. Trade negotiations will resume while China agreed to purchase additional US agricultural products. Meanwhile, the ban of supply to Chinese telecom giant would be lifted partially as part of the agreement.
Trump described the meeting as “excellent, as good as it was going to be” and declared that “we’re back on track”. He added, “we will continue to negotiate, and I promise that at least for the time being we won’t be adding additional [tariffs]”. Also, “China will consult with us and will be buying a tremendous amount of food and agricultural products, and they’re going to start doing that almost immediately,” Trump said.
Regarding the issue of Huawei, Trump said “we’ll have to save that until the very end” of the trade talks. However, “one of the things I will allow, however, is… we will keep selling that product.” And, “US companies can sell their equipment to Huawei,” Trump said, but “we’re talking about equipment where there’s no great national security problem with it.”
But so far, nothing substantial was mentioned regarding the core issues of intellectual property theft, forced technology transfer and market distortion by large subsidies to state-owned enterprises. It’s unsure if Trump was already happy with more Chinese purchases. Or he’s completely forgotten what are the most important issues.
On the Chinese side, state-run Xinhua described the meeting result as both presidents agreeing “to restart trade consultations between their countries on the basis of equality and mutual respect.”
In response to the news, IMF Managing Director Christine Lagarde warned: “While the resumption of trade talks between the United States and China is welcome, tariffs already implemented are holding back the global economy, and unresolved issues carry a great deal of uncertainty about the future”.
