Trump, Xi hit pause on trade war to seek lasting deal
Concessions made to get negotiations restarted include easing of anti-Huawei campaign
published : 29 Jun 2019 at 12:39
updated: 29 Jun 2019 at 15:11
OSAKA: US President Donald Trump and China’s Xi Jinping agreed to another truce in their trade war on Saturday, removing an immediate threat looming over the global economy even as a lasting peace remains elusive.
The two sides have agreed to restart trade negotiations that broke down last month, Xinhua News Agency reported, adding that the United States agreed to put no new tariffs on Chinese goods.
“We had a very good meeting with President Xi of China,” Trump told reporters after the meeting on the sidelines of the Group of 20 summit in Japan. “Excellent. I would say excellent. As good as it was going to be. We discussed a lot of things and we’re right back on track.”
The return to the negotiating table ends a six-week stalemate that has unnerved businesses and investors, and at least temporarily reduces fears that the world’s two largest economies are headed into a new cold war. Still, it’s unclear whether they can overcome differences that led to the collapse of a previous truce reached at last year’s G20 meeting.
Both sides appear to have made some concessions in order to get the talks restarted.
While Washington has agreed not to impose any more tariffs on Chinese goods, China has agreed to buy more farm products, according to Mr Trump.
Meanwhile, Washington will ease up on its attempt to freeze the Chinese telecom equipment giant Huawei Technologies out of the lucrative global 5G market. Mr Trump said Huawei would be allowed to buy products from US suppliers.
“US companies can sell their equipment to Huawei,” he said at a news conference. “We’re talking about equipment where there’s no great national security problem with it.”
The US Commerce Department last month moved to blacklist Huawei, cutting it off from US suppliers, though many companies have managed to skirt the restrictions.
Mr Trump said the two leaders discussed Huawei as part of their talks.
“I said that’s okay, that we will keep selling that product, these are American companies that make these products. That’s very complex, by the way,” Trump said. “I’ve agreed to allow them to continue to sell that product so that American companies will continue.”
The US has been engaged in a global campaign to block Huawei from 5G communications networks, calling the company a security threat. The Trump administration has alleged the Chinese government could use Huawei’s products to spy on countries that use them in their networks.
The company has denied that it conducts espionage for Beijing.
Since the trade talks collapsed on May 10, Trump has raised tariffs on US$200 billion of Chinese goods to 25% from 10%. In recent days, he had indicated that the next step could be a 10% tariff on all remaining imports from China — some $300 billion worth, from smartphones to children’s clothes.
Xi spent much of the summit’s first day Friday promising to open up the Chinese economy, and chiding — though not naming — the US for its attack on the global trading system.
In remarks to African leaders on Friday, Xi took a not-so-subtle swipe at Trump’s “America first” trade policy, warning against “bullying practices” and adding that “any attempt to put one’s own interests first and undermine others’ will not win any popularity.”
Xi also called out the US over Huawei and said the G20 should uphold the “completeness and vitality of global supply chains.” China insisted this week that Huawei must be removed from the blacklist under any deal.
Trump used to cite the reduction of America’s goods-trade deficit with China — which reached a record $419 billion last year — as his main aim. But his administration’s focus has shifted to limiting Chinese access to US innovation. China’s government has responded with increasingly harsh rhetoric that underscores its readiness for a long battle.
Other disagreements that caused talks to break down include how to enshrine the Chinese reforms demanded by the US, over intellectual property theft and industrial subsidies, and when and how to lift the tariffs that Trump has come to view as his most powerful economic tool.
Despite a backlash from American businesses, the president remains convinced that tariffs have given him leverage over trading partners — and that they’ve helped the US economy while hurting China’s.
“I view tariffs differently than a lot of other people,’’ Trump told Fox Business Network in an interview ahead of his G20 trip. “And by the way, since tariffs have been on, our market has gone through the roof, if you know what I’m talking about.”
- trade war