Three key issues to look out for as the US and China fumble towards a trade deal

The highly anticipated meeting between the Chinese and American presidents on the fringes of the G20 meeting in Osaka, Japan, on Saturday ended with few surprises.

Both leaders agreed to restart trade talks, which had been on hold since early May. To demonstrate good faith, the US agreed to hold off on pending tariff hikes on some US$300 billion worth of Chinese products. China was said to have agreed to start buying US agricultural products “immediately” but this had not been officially confirmed at the time of writing.

The only unexpected outcome was that telecommunications manufacturer Huawei can resume purchases of US products that pose no national security threats. US President Donald Trump clarified, however, that this was a temporary solution, presumably to get China back to the negotiating table. Huawei remains on the Commerce Department’s entity list and the Huawei issue will be “saved until the very end” of the negotiations.

Successfully averting a further trade war escalation has merely brought both sides back to where they were before May 6. Now, Beijing and Washington will get another shot at negotiating a deal which Treasury Secretary Steven Mnuchin believes is “90 per cent of the way there”.