Published: Sun, June 30, 2019
Finance | By Kristine Clayton

Trade war de-escalation? Washington promises not to hit Beijing with new tariffs

Trade war de-escalation? Washington promises not to hit Beijing with new tariffs

Trump has imposed tariffs on $200 billion of Chinese imports in an effort to force Beijing into intellectual property protection and other reforms of a trading system that Washington says gives China huge unfair advantages. And I said that that's okay, that we will keep selling that product. First, it says nothing about U.S. companies being able to buy from Huawei, as the President has only commented on trade happening in one direction.

"We discussed a lot of things, and we're right back on track", Trump told reporters. He was struck by Trump's use of the term "strategic partner" to describe US relations with China after other administration officials have played up the geopolitical rivalry between the two countries.

A central point of contention between the USA and China is the decision by the Americans to deem the Chinese technology company as "incompatible" with its security interests and that of its allies.

Financial markets are likely to breathe a sigh of relief on news of the resumption in U.S.

"I think it's something that's actually very easy to do". "Talks will ebb and flow, but the direction over the next 12 months will be toward renewed escalation because issues around industrial strategy will prove to be so intractable".

Saturday's meeting between the two leaders was the centerpiece of four days of diplomacy in Asia for Mr. Trump, whose re-election chances have been put at risk by the trade war that has hurt American farmers and battered global markets. He had indicated before the G20 that the next step could be a 10 per cent tariff on all remaining imports from China - some US$300 billion worth, from smartphones to children's clothes.

It's unclear if American and Chinese negotiators will be able to strike an accord, given complex hurdles, though both sides agreed not to heighten tensions.

Eleven rounds of talks failed to end the standoff. Trump raised tariffs to 25% from 10% on $200 billion of Chinese goods, and China retaliated with levies on USA imports.

The United States says China has been stealing American intellectual property for years, forces US firms to share trade secrets as a condition for doing business in China, and subsidizes state-owned firms to dominate industries.

Mr Trump said at the G-20 press conference on Saturday he had removed the restrictions as a "personal favour" to Mr Xi.

Until May, it appeared that the two countries were slowly closing in on a deal.

Getting them back on track could prove hard.

The company has denied that it conducts espionage for Beijing. What is beneath the trade disputes, is the emergence of a country with the real potential of challenging the supremacy of the United States.

Others close to the administration insist Trump is more a pragmatist than ideologue when it comes to China.

For now, business groups are relieved that the tariffs aren't expanding and optimistic the two countries can reach a deal.

"China is honest about continuing negotiations with the United States. but negotiations should be equal and show mutual respect", the foreign ministry quoted Xi as saying.

In a tweet on Saturday, President Trump invited North Korean leader Kim Jong Un to a brief meeting at the Korean Demilitarized Zone as part of his visit to Seoul where he is scheduled to meet with South Korean President Moon Jae-In.

Still, the decision to go easy on Huawei drew immediate fire politically. We are the only one with the technology.

As far as resolving the overall issue of Huawei, which the USA government wants to bar from the country's planned 5G cellular telephone networks, "we agreed to leave that to the end" of trade negotiations between Washington and Beijing.

"Regardless of the outcome of that meeting, we have to understand that tensions between China and the USA will continue in the long term because this is more than just trade issues". Trump, too, is confronted with an economy that, though still healthy, has looked a bit wobbly. -China trade war enters its second year. The leaders had earlier agreed to another truce in December, only to see negotiations break down after Trump said China pulled back from commitments it had made.

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