The US and China declared a temporary trade war truce on Saturday as the presidents of both countries met on the sidelines of the just concluded G-20 Osaka Summit and agreed to restart talks, reports say.
Trump said the US will not impose tariffs on $325 billion worth of Chinese imports for now.
This will give more time for both sides to reach an agreement on trade and market access.
Trump assured Xi that he would allow US companies to sell their products to the Chinese firm Huawai but the question of giving the telecom giant access to US market will be discussed sometime later if talks make progress.
The Trump administration considers Huawei a security risk and it has effectively banned US companies from involving the company in their 5G networks.
Washington believes the information flowing through Huawei networks could be accessed by the Chinese government which has alleged links with the company.
Xi said China and the US benefit from cooperation and lose in confrontation.
While Huawei remains a contentious issue for both sides, Washington’s decision not to impose additional tariffs has come as a relief for China. Almost all Chinese products imported to the US would have been affected had Trump gone ahead with the new tariff plan.
The temporary trade war truce has relieved other nations which feared Trump’s policy of protectionism and the yearlong tariff wars with China could further slow global growth and disrupt the supply chain.
The US has already imposed tariffs on $250 billion worth of
Chinese goods. China hit back by slapping duties on $110 billion worth of US
The US-China trade war hung like a cloud over the Osaka summit and World leaders were awaiting something positive to emerge from the Trump-Xi meeting on its sidelines.
If the present trade truce does not pave way for a historic deal between the world’s two most powerful economies, it may collapse as it did after the G20 summit in Argentina last December.
Both sides should have a clear roadmap for the deal. Otherwise talks will fail and the two sides will again start raising tariffs against each another.