Markets in Europe, China, and the US appear to be on the rebound after an announcement by US President Donald J. Trump that negotiations with China would resume as part of an attempt to de-escalate the current trade stand-off between the world’s two largest economies.
Trump said Washington will scale back restrictions on Chinese technology giant Huawei and delay the implementation of $200 billion worth of new tariffs on Chinese goods.
That is not the first time the forum operates as a platform for bilateral negotiations. During the December G-20 summit in Argentina, Trump and Chinese President Xi Jinping agreed to begin negotiations to resolve trade differences and hold off on further tariffs.
Trump took with him to Osaka US Trade Representative Robert E. Lighthizer, Secretary of State Mike Pompeo, Treasury Secretary Steven Mnuchin, and top trade adviser Peter Navarro, which allowed him to take an informed and credible decision on the resumption of talks.
The Trump administration is threatening to impose a 25% tariff on an additional $300 billion worth of Chinese exports. The $250 billion existing tariffs on Chinese goods cover industrial equipment and a range of consumer goods, but the White House was ready to extend the tax to cover a whole range of Chinese exports.
The US has agreed to hold off on any further tariff escalation so long as China reciprocates by reopening the door to US agricultural produce. China’s punitive tariffs on agricultural goods which led Trump to announce a $20 billion aid package for farmers in need of a boost after losing the Chinese market, particularly for soybeans.
The US has successfully undermined the global outreach of China’s controversial communication giant Huawei, which is under growing suspicion that the company cooperates closely with China’s intelligence services. On 29 June, Trump promised to loosen a series of sanctions that disrupt the supply of goods and services from US companies to Huawei. The sanctions have reportedly cost Huaw $30 billion in 2019 alone.