The US President, Mr. Donald Trump, and China’s Mr. Xi Jinping agreed to another truce in their trade war on Saturday, removing an immediate threat looming over the global economy even as a lasting peace remains elusive.
The two sides have agreed to restart trade negotiations that broke down last month, Xinhua reported, adding the U.S. agreed to put no new tariffs on Chinese goods. Mr. Trump said the U.S. would release a statement soon.
'We had a very good meeting with President Xi of China,' Mr. Trump told reporters after the meeting on the sidelines of the Group of 20 summit in Osaka. 'Excellent. I would say excellent. As good as it was going to be. We discussed a lot of things and we’re right back on track.'
The return to the negotiating table ends a six-week stalemate that has unnerved companies and investors, and at least temporarily reduces fears that the world’s two largest economies are headed for a new cold war. Still, it’s unclear whether they can overcome differences that led to the collapse of a previous truce reached at last year’s G-20.
Concern about the standoff has prompted investors to bet on central-bank easing, and pile into havens. Treasury yields have tumbled to their lowest level in years. The Japanese yen, a traditional beneficiary of flight to quality, has gained, while the U.S. dollar has slipped across the board, including against China’s yuan. Stocks have seesawed on each new twist in the trade tug-of-war.
Since the talks collapsed on May 10, Mr. Trump has raised tariffs on 200 billion dollars of Chinese goods to 25% from 10%. In recent days, he had indicated that the next step could be a 10% tariff on all remaining imports from China -- some 300 billion dollar -worth, from smartphones to children’s clothes.
Another big hurdle, referenced elliptically by both leaders the U.S. blacklisting of Huawei Technologies Co. on national security ground.