Posted on July, 3, 2019 at 09:31 am
The US and China have agreed to resume trade talks, easing a long row that has contributed to a global economic slowdown.
US President Donald Trump and China’s President Xi Jinping (both pictured right) reached agreement at the G20 summit in Japan.
Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession. Trump had threatened additional trade sanctions on China.
However, after the meeting on the sidelines of the main G20 summit in Osaka, he confirmed that the US would not be adding tariffs on $300 billion (Sh30.8 trillion) worth of Chinese imports.
The Huawei question
He also said he would continue to negotiate with Beijing “for the time being”. And at a subsequent press conference, Trump declared that US technology companies could again sell to China’s Huawei – effectively reversing a ban imposed last month by the US commerce department.
President Trump has positioned his trade talks with Xi as a win for the US – but he may have also given Beijing exactly what it wants on Huawei.
It is still not clear whether what Trump has announced is a complete reversal – but if it is, it would be a significant concession by the US on a company that Washington has said is a threat to national security.
The resumption of talks and pressing the pause button on more tariffs will be seen in the short term as positive for markets and American businesses.
Those have already complained about the cost of further tariffs saying that if they had gone ahead – American consumers would have ended up paying something like $12 billion (Sh1.2 trillion) more in higher prices
Chinese businesses have been suffering too – the trade war has hit investment plans, business confidence, and exports in the world’s second largest economy.
But pressing pause does not mean the trade war is over. Tariffs on hundreds of billions of dollars worth of goods are still in place. And the two sides still have much to agree on.
The truce signals a pause in hostilities rather than a resolution of the dispute, which has caused market turbulence and hit global growth. –BBC
Source: MediaMax Network