US President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce on Saturday, as Washington vowed to hold off on further tariffs and declared trade negotiations with China “back on track.”
The ceasefire that halts damaging trade frictions came in a hotly anticipated meeting between the leaders of the world’s top two economies on the sidelines of the G20 summit.
Trump hailed the meeting in the Japanese city of Osaka as “excellent.”
“We are right back on track,” he added.
There was little in the way of concrete details on what was agreed, but Trump confirmed Washington had committed not to impose any new tariffs on Beijing’s exports and that the two sides would continue talks.
“We won’t be adding an additional tremendous amount of $350 billion dollars left which could be taxed or could be tariffed. We’re not doing that, we are going to work with China on where we left off to see if we can make a deal,” Trump said at press conference.
“We will be continuing to negotiate.”
The outcome was likely to be seen as a win, with experts cautioning ahead of the meeting that a full agreement was unlikely but a truce that avoided a new tit-for-tat round of tariffs would be positive.
“The base case scenario was met at G20 and while we are no worse for wear, let’s see what the G20 hangover brings,” said Stephen Innes, market analyst at Vanguard Markets.
Trump struck a conciliatory tone after his arrival in Japan for the summit, despite saying China’s economy was going “down the tubes” before he set out for Osaka.
He said he was ready for a “historic” deal with China as the leaders kicked off their meeting, and Xi told him that dialogue was better than confrontation.
In their final statement, the G20 leaders admitted that “most importantly, trade and geopolitical tensions have intensified,” echoing hard-won language from their finance ministers at a meeting earlier this month.
There were no immediate details about the closed-door discussions but Trump said they had covered the thorny subject of Chinese telecoms firm Huawei, adding that a solution on this may have to wait until the closing stages of talks.
Washington has banned the company over security concerns and China reportedly wanted the restrictions lifted under the terms of any trade truce.
The tete-a-tete between the US and Chinese leaders – the first since the last G20 in December – cast a long shadow over this year’s gathering in Osaka.
Economists say that a lengthy trade war could be crippling for the global economy at a time when headwinds including increased geopolitical tensions and Brexit are blowing hard.
On Friday, the European Union and the South American trade bloc Mercosur sealed a blockbuster trade deal after 20 years of talks, with European Commission President Jean-Claude Juncker hailing it as a “strong message” in support of “rules-based trade.”
Trade has proved far from the only contentious issue on the summit table, with climate change another major sticking point.
A diplomatic source said it had been a “difficult” night of negotiations, with an American delegate pushing a “very tough position” and the others standing united against watering down the climate language in the final statement.
In the end, a deal of sorts was reached, with 19 members – minus the United States – agreeing Saturday to the “irreversibility” of the Paris climate deal and pledging its full implementation.
The language in the final statement mirrored that agreed during last year’s G20 but this did not satisfy French President Emmanuel Macron who urged leaders to go “much further” on climate change.
Trump has dominated the headlines from the summit, and once again caught observers by surprise by tweeting early Saturday that he was open to meeting North Korea’s Kim Jong Un while in South Korea this weekend.
“If Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!,” he wrote.
He later said he would be happy to step over the border into North Korea, which would represent an extraordinary move for a US leader after decades of enmity between Washington and Pyongyang.
