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Beijing says US will not impose new tariffs on China exports

  
  Analysis
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The U.S. will not levy new tariffs on Chinese exports, Chinese state media said after bilateral talks between Donald Trump and Xi Jinping on the sidelines of the Group of 20 summit in Osaka.

The world’s two biggest economies have agreed to restart trade talks, Xinhua news said, adding that the two sides will have discussions on “specific” issues.

The two leaders met for the first time in nearly seven months on Saturday, again on the sidelines of a global meeting, in an attempt to turn the heat down on a boiling trade war.

Trump is angry at the trade imbalance between the two countries, and has imposed rounds of tariffs on goods the U.S. imports from China. China retaliated by raising tariffs.

As the bilateral meeting began, Xi said he is prepared to exchange his thoughts and that he hopes to set the direction of China-U.S. relations “based on coordination, cooperation and stability.”

He added, “cooperation and dialogue are better than friction and confrontation.”

Trump responded by saying, “It would be historic if we can do a fair trade deal.”

“This could be a very productive meeting,” he said. (more…)

G20 starts today, US – China meeting tomorrow. Deal seen as unlikely … but

  
Analysis, Economy
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Perhaps there is scope for some sort of US – China agreement stemming from the Trump – Xi meeting at the G20 summit.

‘Agree to keep talking’ seems the most likely outcome IMO, but we’ll soon find out. Any increase in hostility would be a negative but a dinner together is probably not going to lead to this, at least right away.
When do we get a deal? If we do.?
An interesting overnight note from ING says it’ll not be until towards the end of this year:
both sides want a deal
  • China can hurt the US economically but it knows that the US can hurt China even more. 
  • President Trump needs a deal to show the American people that he delivers on his promises to get better terms of trade for the US. He knows that this is best done without the US economy having to suffer from Chinese retaliation for an extended period of time.
We expect a deal to be struck in the last quarter of this year
  • it is likely that China as well as the US are prepared to make concessions in the end
  • After all, this is what’s happened in the renegotiation of Nafta
  • To strike a deal, Trump had to accept that Mexico and Canada would not agree to all of his original demands
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On that 
  • Trump had to accept that Mexico and Canada would not agree to all of his original demands
You’d say the same of China, but so far they’ve held firm. 
Added – G20 start 28th.
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