Trump and Xi Offer Concessions in Trade Talks but Future Remains UncertainJuly 5, 2019
U.S. President Trump and Chinese President Xi Jinping met in Osaka, Japan, on Saturday, agreeing to restart trade talks with each party returning to the negotiation table offering certain concessions.
On the U.S. side, Trump said he would not impose any new tariffs on the Asian country’s imports and would ease restrictions on tech company Huawei. As for Xi, he said he would make new – but unspecified – purchases of U.S. farm products.
No deadline was set for progress on a deal, and the world’s two largest economies remain at odds over significant parts of an agreement, commented Reuters.
Still, financial markets, which have suffered from the nearly year-long trade war, are likely to cheer the truce, it added.
Washington and Beijing have slapped tariffs on billions of dollars of each other’s imports, stoking fears of a wider global trade war. Those tariffs remain in place while negotiations resume.
“We’re right back on track,” Trump told reporters after an 80-minute meeting with Xi Jinping at a summit of leaders of the Group of 20 (G20) major economies in Osaka, Japan.
Trump tweeted later that the meeting with Xi went “far better than expected. “The quality of the transaction is far more important to me than speed,” he tweeted. “I am in no hurry, but things look very good!”
Trump made a major compromise with Xi concerning China’s Huawei Technologies Co [HWT.UL], the world’s biggest telecom network gear maker, noted Reuters.
Previously, the Trump administration claimed the Chinese firm is too close to China’s government and poses a national security risk.
Trump’s Commerce Department even put Huawei on its “entity list,” effectively banning the company from buying parts and components from U.S. companies without U.S. government approval. But Trump said on Saturday he did not think that was fair to U.S. suppliers.
He noted that the U.S. Commerce Department would evaluate in the next few days whether to take Huawei off its entity list.
This decision was applauded by both China and U.S. microchip makers.
“We are encouraged the talks are restarting and additional tariffs are on hold and we look forward to getting more detail on the president’s remarks on Huawei,” John Neuffer, president of the U.S. Semiconductor Association, said in a statement.
Yet not all U.S. politicians are likely to welcome the move.
Last month, Republican U.S. Senator Marco Rubio and Democratic U.S. Senator Mark Warner urged Trump to not use Huawei as a bargaining chip for trade negotiations.
Huawei has come under mounting scrutiny for over a year, led by U.S. allegations that “back doors” in its routers, switches and other gear could allow China to spy on U.S. communications.
The company has denied its products pose a security threat.
An uncertain future for the U.S. and China
Regarding tensions between the two administrations, a number of Asia specialists, including former U.S. diplomats and military officers, have urged Trump not to “treat China as an enemy.”
They warn that this approach could hurt U.S. interests and the global economy, according to a draft open letter reviewed by Reuters on Saturday.
Although analysts cheered a resumption of talks between Washington and Beijing, the future relationship between the world’s largest economies remains uncertain.
Some are left questioning whether the two sides would be able to build enough momentum to breach the divide and forge a lasting deal, explained Reuters.