After talks in Osaka, Donald Trump and Xi Jinping agreed to another ceasefire in the ongoing (and increasingly bitter) trade dispute between the world’s two largest economies.
The agreement appears similar to that struck in Argentina in December. Trade talks will restart and, for now anyway, there will be no new tariffs on Chinese goods.
“We had a very good meeting”, Trump said of his chat with Xi. “Excellent. I would say excellent. As good as it was going to be”, he added, for emphasis. “We discussed a lot of things and we’re right back on track”.
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The earliest reports that talks are set to resume came from Xinhua. CCTV subsequently said the US agreed to no new tariffs, averting the dreaded “all-in” scenario that would have found Trump slapping duties on another $300 billion of Chinese goods.
Xinhua would later say Trump is “willing to have a mutually acceptable deal” and intends to “solve” the trade imbalance with dialogue. The US also committed to continuing with a one-China policy, Xinhua noted, adding that Washington values Beijing’s role in helping to defuse (figuratively and literally) North Korea “issues”.
The result of the talks is largely in line with what analysts expected. A “truce” outcome that sees the resumption of principal-level talks and a commitment to no further escalations was the base case and is reminiscent of the Buenos Aires deal. Trade teams from both sides will begin to sort out the details. The talks, Xi insisted, should be conducted on equal footing.
Xinhua went on to say that Trump expressed his desire to see China buy more products from the US and hopes to achieve equal treatment of companies from both countries. One of China’s demands for restarting talks had been that expectations for Chinese purchases from the US would be in line with economic reality.
Xi insisted that Beijing will defend “core interests” of pride and sovereignty. He also said he “hopes” the US will treat Chinese companies and students fairly and cautioned that the two sides should avoid “the trap” of confrontation. Recently, the US began cracking down on Chinese researchers.
The ceasefire is predictably short on key details, including whether China is prepared to go back to the deal that the US side claims was “90%” done before Xi ordered a red marker taken to it, prompting Trump’s infamous May 5 tweets announcing the tariff hikes.
There was also no immediate mention of Huawei. Headed into the talks, reports suggested Xi would push to have the ban on Beijing’s corporate crown jewel lifted as a precondition. That, we suggested, would be a tall order.
Later, at a press conference, Trump suggested Huawei will be, at the least, granted a reprieve. Although his comments were vague and characteristically convoluted, they came across as conciliatory. “One of the things I will allow, however, and a lot of people are surprised, we sell and we send to Huawei a tremendous amount of product that goes into the various things that they make”, Trump remarked. “And I said that that’s ok”.
See full highlights from the presser: China, Huawei, Stocks And Khashoggi: Highlights From Trump’s ‘Hot Show’ G20 Press Conference
In his initial remarks to Trump, Xi was all statesman. There was no mention of the relationship having deteriorated.
For his part, Trump played up his personal relationship with Xi and, as usual, reiterated that it would be “monumental” if the two sides could strike a deal. Trump attempted to walk a fine line between emphasizing “fairness” and noting that an agreement would be “great for both countries”. One key sticking point of China’s is that the language of any agreement must respect the dignity of both sides.
The visuals that emerged from the US-China bilateral underscored the extent to which Trump is now surrounded by an almost cartoonish cast of characters. At meeting after meeting, the US president has faced the world’s most powerful men and women flanked by his daughter Ivanka, Steve Mnuchin, Mick Mulvaney, John Bolton and Peter Navarro.