President Donald Trump meets with Chinese President Xi Jinping in Osaka, Japan. | Susan Walsh/AP Photo
OSAKA, Japan — President Donald Trump on Saturday stepped back from an escalation of his trade war with China that threatened to damage his 2020 reelection chances.
During a 80-minute meeting with Chinese President Xi Jinping, Trump agreed not to proceed with plans to impose a 25 percent duty on another $300 billion worth of Chinese goods.Story Continued Below
“We’re holding on tariffs, and they’re going to buy farm product,” Trump told reporters during a press conference after his meeting with Xi at the annual G-20 leaders summit here in Osaka.
American farm exports to China have plummeted as a result of the trade war. Total sales this budget year are forecast at $6 billion, down from a high of nearly $26 billion when Barack Obama was president.
The decision to halt additional tariffs will also be welcome news to retailers and consumers, especially lower-income voters who rely on cheap imports, going into the 2020 election.
The United States will keep in place a 25 percent duty on $250 billion of Chinese goods that Trump imposed earlier. It will also give China a list of U.S. products to buy, Trump said.
In what appears to be a concession to Xi, Trump said he would loosen a trade ban that his administration recently imposed on Chinese telecommunications giant Huawei.
The president indicated he thought the restrictions were too tight because Huawei is a major customer for many U.S. technology products.
“We send and we sell to Huawei a tremendous amount of product that goes into the various things they make,” Trump said. “These are American companies that make product. It’s very complex. Highly scientific. And in some cases we’re the ones that do it and the only ones that do it.”
However, Trump said the ultimate resolution of the Huawei issue would be left until the end of negotiations with China.
Trump also said he did not discuss the case of Huawei executive Meng Wanzhou, who was arrested in Canada last December at the request of the United States over allegations of breaching a U.S.-imposed ban on dealing with Iran.
But in response to a reporter’s question, he said the administration would discuss the telecommunications company’s continued presence on the Commerce Department’s “entity list” in the coming days. Later, he said Huawei was “very much in play,” but repeated that the U.S.and China plan to resolve the issue at the end of the talks.
In another area, he indicated his desire to reform U.S. visa policy to allow Chinese students remain and work in the United States after they finish their education. He called it a “smart person’s waiver.”
“We’ll make it so they cannot only stay, but maybe they have access to green cards. We want to keep them here,” Trump said.
Trump did not specify any deadline for concluding the negotiations and was cautious about predicting success. “This doesn’t mean there will be a deal. They would like to make a deal. I can tell you that. If we can make a deal it would be historic,” Trump said.
Trump’s decision to put tariffs on hold should please financial markets worried about the effects of an escalating trade war on U.S. and global growth. But heading into the 2020 presidential campaign he has little to show so far on the China trade front, except lost sales.
Five months of negotiations between the two countries abruptly halted in May after Trump accused China of backtracking on commitments in a nearly 150-page draft agreement to change its laws to implement reforms required by the agreement.
China said the U.S. was entirely to blame for the breakdown.
Still, the freezing of new tariffs is likely to help the Chinese economy The trade war could slash one percentage point off China’s economic growth this year, a top Chinese party official estimated in May.
The U.S. is pushing for structural changes to the Chinese economy on issues such as the transfer of proprietary technologies from U.S. companies doing business in China. A more challenging issue will be changing government subsidies and other advantages that Chinese companies and state-owned enterprises enjoy.
Trump brought several of his top advisers to meeting with Xi, including U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross, Secretary of State Mike Pompeo, Treasury Secretary Steve Mnuchin, acting White House chief of staff Mick Mulvaney and White House trade adviser Peter Navarro.
The Chinese side included Vice Premier Liu He, Xi’s chief of staff Ding Xuexiang, top economic planning official He Lifeng, Commerce Minister Zhong Shan, Foreign Minister Wang Yi, Finance Minister Liu Kun, and China’s ambassador in Washington Cui Tiankai.
“China and the United States both benefit from cooperation and lose in a confrontation,” Xi told Trump during the meeting. “Cooperation and dialogue are better than friction and confrontation.”
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