The U.S. and China agreed to resume trade talks after a seven-week breakdown and the Trump administration has decided to hold off for now adding new 25 percent tariffs on some $300 billion in Chinese imports, which would have included apparel and footwear classifications and other popular consumer products.
President Donald Trump also agreed to lift some restrictions on Huawei, the Chinese technology giant at the center of a dispute between the nations.
Trump announced the trade truce after an 80-minute meeting with Chinese President Xi Jinping on the on the sidelines of the annual summit meeting of the Group of 20 nations in Osaka, Japan. 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.
“Basically we agreed today that we’re going to continue the negotiation,” Trump told reporters Saturday. “We’re going to work with China on where we left off to see if we can make a deal.”
In exchange, Trump said China had agreed to increase its purchases of U.S. agricultural products.
“We’re holding on tariffs, and they’re going to buy farm product,” Trump said.
Trump tweeted hours 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!”
The temporary cease-fire does not end the trade war between the U.S. and China. Indeed, Trump said the 25 percent tariffs currently imposed on $250 billion in Chinese goods will not be reduced.
Chin Xi’s government has retaliated by taxing U.S. exports, while at the same time reducing tariffs on competing products from other countries.
In a lengthy statement on the two-way talks, China’s foreign ministry quoted Xi as telling Trump he hoped the United States could treat Chinese companies fairly.
“China is sincere about continuing negotiations with the United States … but negotiations should be equal and show mutual respect,” the foreign ministry quoted Xi as saying.
The official China Daily, an English-language daily often used by Beijing, warned there’s no guarantee the two sides would reach an agreement.
“Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air,” it said in an editorial late Saturday. “Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level.”
The Eurasia Group has forecast only a 45 percent chance that Beijing and Washington reach a deal by the end of the year. The issue of intellectual property protection remains a major sticking point between the two sides.
The United States says China has been stealing American intellectual property for years, forces U.S. firms to share trade secrets as a condition for doing business in China, and subsidizes state-owned firms to dominate industries. China has said the United States is making unreasonable demands and must also make concessions.
The negotiations hit an impasse in May after Washington accused Beijing of reneging on reform pledges made during months of talks. Trump then raised tariffs to 25 percent from 10 percent on $200 billion of Chinese goods, and China retaliated by raising levies on a list of U.S. imports.
Goldman Sachs has said its base case remains a 10 percent tariff on the remaining $300 billion worth of Chinese exports to the U.S., which is lower than the 25 percent rate proposed the United States Trade Representative.
More than 600 U.S. companies, including Target and Walmart, had urged Trump not to impose additional tariffs, warning that such a move could cost 2 million American jobs.
