After a meeting at the G-20, the United States and China have come to a basic agreement not to escalate their trade war any further. This news has come as a welcome for many who have been concerned with the long term effects of the tariffs from both sides. President Trump met with President Xi at the G-20 Summit in Osaka Japan, which began last week. President Trump noted that he agreed to hold off on the next round of tariffs in exchange for an increase of purchases in U.S. farm goods. U.S. exports in soybeans, almonds, pork, and apples by farmers to China used to account for 60% of all their exports. However, the current trade war has reduced that export percentage to about 25% for these products.
One of the concessions that President Xi has wanted includes an easing on the restriction of sales in the U.S. on Huawei products. However, President Trump has noted that is not a bargaining chip he is willing to make any significant negotiations on at the moment. President Trump has been strongly advised against easing restrictions on imports from Huawei. Because of this, the president has led a global effort to ban the products from use among allied nations. It is believed that China has increased its foreign spying capability through Huawei products.
Last year, the president had been alerted by national security agencies that the risk of spying through Huawei is significant. Because of this, the United States has banned the company from bidding or completing any government projects.
Overall, the trade war with China has dampened their economy much more than it has hurt the United States economy. Part of this is because the trade deficit with China has been significantly imbalanced over the last few decades. China has benefited significantly from U.S. companies who have imported products from Chinese companies at a much higher rate than Chinese companies have been importing from the United States. This has dramatically enhanced the Chinese economy and put it on track to be a significant world power.
The trade talks abruptly ended last year when the U.S. walked out of talks with China after they suddenly backed out on some of the concessions that were previously agreed upon. While there are incentives for both sides to attempt to make a trade deal, there is no guarantee one will be forthcoming anytime soon. President Trump indicated that China would like to make a deal, but there are still too many areas where the countries are at an impasse to ensure a complete trade deal is forthcoming.