OSAKA, Japan – As a trade war between the world’s two most powerful economies trundles on, all eyes were firmly fixed on Donald Trump and Xi Jinping at the Osaka G20 summit, where the pair grabbed headlines with a pledge to get stalling trade talks back on track.
Disgruntled with a large trade deficit with Beijing, Trump’s administration has since last year hiked tariffs on billions of dollars worth of Chinese products and has more recently taken aim at Chinese telecommunications giant Huawei warning that its plans to export 5G technology around the world concealed ulterior motives, including possible espionage.
China has, in turn, slapped tariffs on US products.
The stage for Trump and Xi’s meeting was set in Osaka, as the leaders of the world’s 20 foremost and emerging economies descended on the Japanese city for the annual gathering.
“We discussed a lot of things,” Trump said following his meeting with Xi. “And we’re right back on track and we’ll see what happens.”
Before the summit, the Republican leader had threatened to levy a further $300 billion tariffs on Chinese imports.
At the summit, Trump shelved those threats, at least temporarily, although he said existing tariffs would remain in place.
“We will be continuing to negotiate, and I promise that for at least the time being we’re not going to be lifting tariffs on China,” he said following his meeting with his Chinese counterpart on the sidelines of the main gathering. “We won’t be adding an additional, we have, I guess $350 billion left which could be taxed of tariffed.”
Xi welcomed the tentative progress, too.
“Cooperation and dialog are better than friction and confrontation,” he said.
Another hot topic for Trump and Xi was Huawei.
The American leader told a press conference after his talks with Xi that he would slacken his country’s restrictions on sales to the Chinese phone company, another target for Washington in the trade dispute.
“US companies can sell their equipment to Huawei,” he said, reversing one part of the ban, for which Huawei had revised its sales projection this year by $30bn.
As things stand, US companies are not permitted to purchase Huawei technology. Washington has warned its allies that accepting 5G services from the Chinese firm could pose a security risk, alleging that the Chinese government could use it as a way to gain backdoor access for spying.
Huawei has vehemently denied the allegations.
Along the same lines, the final declaration at the G20 meeting declared support for the principles of free trade and economic growth.
Japan’s Prime Minister Shinzo Abe, the host of this year’s gathering, said the 20 leaders had reaffirmed their support for “the fundamental principles backing a free trade system” and placed special emphasis on achieving open, free and non-discriminatory markets and a level playing field.
He said even though it was difficult to find one solution to so many global challenges at once, the group had managed to show a common will in many areas.
The conclusion signed by the leaders flagged the intensification of geopolitical and trade tensions but took no concrete steps to put the brakes on emerging protectionism, a policy spear-headed by Trump, to the dismay of pro-free trade leaders.
The leaders also signed a statement reaffirming their commitment to the Paris climate deal, with the notable exception of the United States.
Trump made headlines elsewhere on the summit’s sidelines by falling short of addressing the case of Jamal Khashoggi, the journalist allegedly assassinated by a Saudi hit squad, during his meeting with Saudi Arabia’s crown prince, Mohammed bin Salman.
While the US and China made tentative progress in their fractious trade negotiations, the European Union and the Mercosur bloc celebrated the closure of their own free trade agreement after 20 years of discussions.
Argentina’s president, Mauricio Macri, representing the South American trading group as the current holder of the rotating presidency, and EU commission president, Jean-Claude Juncker, hailed the deal.
“This deal sends a real message in support of open, fair, sustainable and rules-based trade because trade creates good jobs for all concerned,” Juncker told a press conference late Friday. “It shows that in these turbulent moments, agreements can be reached. Mutually beneficial compromises can be found.”
The massive trade agreement opens up a market covering 780 million people and wipes about $4.5 billion worth of tariffs for European companies.
As the G20 came to a close, the American president grabbed the headlines once again, suggesting he meets with North Korea’s leader Kim Jong-un at the border during his visit to South Korea, his next stop after Osaka.
His unexpected offer came in the form of in a tweet early Saturday morning from the G20 just hours ahead of his trip to Seoul, South Korea, to visit President Moon Jae-in.
“While there, if Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!” he said.
It was long rumored that Trump was scheduled to visit the demilitarized zone between North and South Korea during his visit to Seoul this Saturday and Sunday, but the White House had assured that the president would not meet Kim Jong-un there.