Published: Sun, June 30, 2019
Markets | By Erika Turner

Trump suspends new tariffs, US and China to restart trade talks

Trump suspends new tariffs, US and China to restart trade talks

Donald Trump has said he expects a "productive" meeting with Chinese President Xi Jinping (R) on the sidelines of the G20.

"We've had an excellent relationship", Mr. Trump told Xi as the meeting opened, "but we want to do something that will even it up with respect to trade".

According to the South China Morning Post, Trump, said the decision on whether to take Huawei off the Commerce Department's entities list would be left to a later date, adding he will have a meeting on the same subject next week.

China's Xinhua state-run news agency reported the US would hold off on threatened tariffs.

Trump's decision to put tariffs on hold should please financial markets anxious about the effects of an escalating trade war on US and global growth.

For almost two months, a series of escalations to the on-going trade spat between the United States and China had held the financial markets hostage, almost forcing a change in USA monetary policy, while threatening to drive the global economy into recession.

China has said the United States is making unreasonable demands and must also make concessions.

What is beneath the trade disputes, is the emergence of a country with the real potential of challenging the supremacy of the United States.

"Business Roundtable is encouraged that President Trump and President Xi agreed to resume trade negotiations and suspend any further tariff escalation", the organization said in a statement on Saturday.

Beijing is insisting that the US remove its ban on the sale of USA technology to Chinese telecommunications giant Huawei Technologies Co Ltd, the Journal said https://on.wsj.com/2NiB88J, citing Chinese officials with knowledge of the plan.

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"Cooperation and dialogue are better than friction and confrontation". There's no guarantee they'll reach a trade agreement any time soon, especially if China continues to push back against restrictions that would require its companies to stop stealing intellectual property from their American counterparts. But the Trump administration insists on keeping tariffs to use as leverage to make sure that China keeps its promises.

Trump hailed the meeting in the Japanese city of Osaka as "excellent".

"We are seeing what goes with the trade agreement". The United States has imposed 25% import taxes on $250 billion in Chinese products and threatened to target $300 billion more - a move that would extend the tariffs to virtually everything China ships to the United States.

"I would say probably even better than expected, and the negotiations are continuing".

"The base case scenario was met at G20 and while we are no worse for wear, let's see what the G20 hangover brings", said Stephen Innes, market analyst at Vanguard Markets.

"For at least the time being, we're not going to be lifting tariffs on China".

"We mentioned Huawei. I said we'll have to save that until the very end", Trump said during a post-summit news conference.

The United States has alleged that China has been stealing U.S. intellectual property for years, by forcing USA companies to share trade secrets as a condition for doing business in China, while subsidising state-owned firms so they could dominate both domestic and global business.

The U.S. has been engaged in a global campaign to block Huawei from so-called 5G communications networks, calling the company a security threat.

President Trump arrived in Seoul on Saturday evening ahead of a potential meeting with North Korean leader Kim Jong Un in the DMZ.

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