US and China successfully revived their relationship after the premiers of both the nations, Donald Trump and Xi Jinping met on Saturday at the G20 conference in Japan. The meeting between the two went on for more than an hour. After the highly anticipated meet, as a goodwill gesture, Trump announced that he would put the new tariffs on hold, which he earlier proposed on Chinese’s imports.
“We’re right back on track. We’ll see what happens,” Trump said after the talks concluded.
Trump told reporters that he would impose new tariffs if an agreement couldn’t be reached between the two nation, though the existing duties wouldn’t be taken away.
Trump said, “I promised that for at least the time being we’re not going to be lifting tariffs on China. We won’t be adding an additional tremendous amount — we have $350 billion left that could be tariffed, taxed — we’re not going to be doing that.”
Trump later added, “We’ve had an excellent relationship but we want to do something that will even it up with respect to trade.”
The talks led to de-escalate of the long trade war, though it is not clear if either of the two is willing to compromise on a long term solution.
“One basic fact remains unchanged,” Xi said. “China and the United States both benefit from cooperation and lose in a confrontation. ”
Two of the world’s biggest economies were on the brink of having an agreement over tariffs, but both broke the trade negotiations in May. The US accused China of backing out of previously made commitments, of agreeing to incorporate certain reforms in exchange for tariff relief.
The US is stern on its demands for China to roll back government subsidies for state-owned enterprises and improve corporate governance, which is an extremely sensitive issue for China.
The trade war between the two started as US blamed China of unfair trade practices including barriers against foreign companies to access its market and providing subsidies to favour Chinese companies. Trump administration said that such a biased approach has resulted in the loss of hundreds of thousands of US jobs over the past two decades. To put pressure on Beijing, Washington levied tariffs on Chinese imports. Beijing responded by putting duties on virtually every product it buys from the United States.
The trade war has not only affected these two economies but also global investment and trade markets. Hence, the G-20 leaders are building greater pressure on the negotiators to reach an amiable conclusion.