Huawei Will Now Be Able to Conduct Business with US Companies

Ann Santiago
July 1, 2019

US President Donald Trump and China President Xi Jinping have met at the G20.

While the truce will be welcomed by markets and buinesses on both sides of the Pacific it offers no clear path forward on the trade dispute. "Importantly, we have opened up negotiations again with China as our relationship with them continues to be a very good one".

"We got along very well", Trump added.

Other disagreements that caused talks to break down include how to enshrine the Chinese reforms demanded by the U.S., over intellectual property theft and industrial subsidies, and when and how to lift the tariffs that Trump has come to view as his most powerful economic tool.

China's state-run Xinhua News Agency also reported that the two sides agreed to restart trade negotiations and that the USA will not impose new tariffs.

Xi Jinping told Trump that he hopes the United States can treat Chinese companies fairly, Xinhua reported.

On the issues of sovereignty and respect, China must safeguard its core interests, Xi was cited as saying.

The Chinese foreign ministry noted that the negotiations would cover specific issues but provided no details.

The US has imposed 25% import taxes on $250 billion in Chinese products and is threatening to target an additional $300 billion, extending the tariffs to virtually everything China ships to America.

Last month, Huawei was put on the trade blacklist, and Trump said its status won't be decided until the end of the China-U.S. trade talks.

In their final statement, the G20 leaders admitted that "most importantly, trade and geopolitical tensions have intensified", echoing hard-won language from their finance ministers at a meeting earlier this month.

Trump also said the USA will resume allowing American companies to sell products to Chinese technology company Huawei, a central firm in us complaints about China.

He said U.S. companies could sell equipment in cases "where there's no great national security problem" with the firm, which Washington fears poses security risks. Whether investors can hold on to the gains will likely be determined by the direction of U.S. Treasury yields. I am in no hurry, but things look very good!

Some, however, warned the pause might not last.

"What's happening now is simply a loosening up for general merchandise", Kudlow said.

The United States says China has been stealing US intellectual property for years, forces USA firms to share trade secrets as a condition for doing business in China, and subsidizes state-owned firms to dominate industries. China views itself as the United States' peer and won't capitulate to demands that compromise its sovereignty.

Talks collapsed in May after Washington accused Beijing of reneging on reform pledges.

Trump earlier Saturday signaled the USA had made progress in trade discussions with China ahead of the lunch meeting in Japan. "If President Donald Trump backs off, as it appears he is doing, it will dramatically undercut our ability to change China's unfair trades practices", Senate Minority Leader Chuck Schumer (D-New York) stated.

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