Published: Sun, June 30, 2019
Money | By Ethel Goodwin

Trump Announces Temporary Trade Truce After Meeting with Chinese President Xi Jinping

Trump Announces Temporary Trade Truce After Meeting with Chinese President Xi Jinping

Trump said China had agreed to buy a "tremendous" amount of U.S. goods to reduce the trade imbalance.

President Donald Trump poses for a photo with Chinese President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan, Saturday, June 29, 2019.

The US President has warned that, although a deal this weekend is possible, he is willing to impose tariffs on virtually all remaining tariff-free Chinese goods and gradually do less and less business with China.

The uncertainty in markets caused by conflicting reports on trade in the week leading up to the G20 meet in Japan stalled a rally in stocks and set the main index on pace to post its first weekly loss this month.

The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing. The Commerce Department last month blacklisted the company for national security reasons.

The US fears that systems built by Huawei ― the world leader in telecom network equipment and number two smartphone supplier ― could be used by China's government for espionage via built-in secret security "back doors". However, Huawei denied all allegations calling upon the government to show evidence that it was spying.

China, in turn, said the US's demands for business reform were unreasonable.

China's Global Times, published by the ruling Communist Party's official People's Daily, said earlier on Saturday the world had to "contain capricious USA actions", pointing to examples like Mr Trump withdrawing from the Paris climate accord.

Huawei replied on one of its verified Twitter accounts: "U-turn?"

Trump had his first face-to-face discussion with Saudi Arabia's Mohammed bin Salman since USA intelligence agencies concluded that the crown prince directed the murder of Washington Post columnist and American resident Jamal Khashoggi a year ago. The move could draw pushback from Democrats and congressional leadership.

Mr Trump accused China of stealing intellectual property and forcing United States firms to share trade secrets in order to do business in China, which in turn said U.S. demands for business reform were unreasonable. The White House didn't release details about Trump's plans for delaying the Huawei ban or the expansion of tariffs on goods originating from China. The news may cause investors to reduce the chances of a Fed rate cut at the end of July.

It was not immediately clear what, specifically, Trump had in fact agreed to.

During a press conference, President Trump said that "US companies can sell their equipment to Huawei".

What just happened? Chinese tech giant Huawei has been enduring a harsh situation after many countries have said that the company can play no part in national digital infrastructure projects.

A Huawei spokesperson told AFP the company had no inital comment. It had also prompted lobbying from US companies like Intel Corp.and Alphabet Inc.'s Google, anxious about losing their sales to a major client.

"I've agreed to allow them to continue to sell that product so that American companies will continue".

Mr Trump said he had agreed with the Chinese president the United States would refrain from raising tariffs on China's imports for now while Beijing would buy more U.S. agricultural products. "We're leaving Huawei toward the end".

Trump has insisted he will decide whether or not to remove Huawei from it later.

Trump has also pledged to use the face-to-face as an opportunity to raise the issue of two detained Canadians.

"The quality of the transaction is far more important to me than speed", he said. Meng faces multiple criminal charges in the USA, including bank and wire fraud, money laundering and conspiring to obstruct justice, each of which carries a maximum sentence of 30 years in prison.

Trump had threatened to extend existing tariffs to nearly all Chinese imports into the United States if the meeting brought no progress on wide-ranging US demands for reforms.

However, after the meeting on the sidelines of the main G20 summit in Osaka, he confirmed that the United States would not be adding tariffs on $300bn (£236bn) worth of Chinese imports. He said he believes it's necessary to "turn the page" in relations with the USA, which have plunged to the lowest level since the Cold War times. Stocks have seesawed on each new twist in the trade tug-of-war.

Xi spent much of the summit's first day Friday promising to open up the Chinese economy, and chiding - though not naming - the USA for its attack on the global trading system. Senate Minority Leader Chuck Schumer said that removing the ban would "dramatically undercut our ability to change China's unfair trades practices".

Meng, who is indicted in the United States on charges relating to violating US sanctions against Iran, is now fighting extradition in Vancouver.

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