US willing to suspend trade war tariff increase after Trump-Xi meeting at G20 in Japan, report says

Chinese President Xi Jinping and US counterpart Donald Trump are set to meet in Osaka on Saturday on the sidelines of the Group of 20 meeting

US has already increased tariffs on US$200 billion worth of Chinese imports from 10 per cent to 25 per cent

2-MIN READ2-MIN

Chinese President Xi Jinping and US President Donald Trump are expected to meet in Japan on Saturday. Photo: AFP

Published: 10:12am, 26 Jun 2019Updated: 10:24am, 26 Jun 2019

The United States is willing to suspend the next round of tariffs on an additional US$300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations, people familiar with the plans said.

The decision, which is still under consideration, may be announced after a meeting between Chinese President Xi Jinping and US counterpart Donald Trump on Saturday at the G20 summit in Japan. A broad outline of the Trump-Xi agenda was discussed in a phone call on Monday between US trade representative Robert Lighthizer, and his counterpart in Beijing, Vice-Premier Liu He, China’s lead negotiator.

People familiar with the American readout of the conversation characterised the call as productive. They said both sides discussed how they can present the resumption of trade talks to their domestic audiences as a win.

The US will not accept any further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expected from the leaders’ summit, a senior administration official said on Tuesday. The Trump administration has said the goal of the meeting is to create a path forward for a trade agreement, after negotiations broke down last month.

Although each side still wants to secure significant concessions from the other, both agreed to dial down the tit-for-tat responses and aim for a truce that could soothe financial markets while their sides resume negotiations, people familiar with the situation said. It is not clear if they would set a definite timetable for the tariff ceasefire.

The US is prepared to delay the new tariffs for the moment because Beijing would not have agreed to the meeting otherwise, people familiar with the matter said.

The talks between the leaders of the world’s two largest economies mark a critical juncture in their nearly year-old trade war, and both sides have plenty to lose if it escalates. Trump is riding a strong economy and booming stock market into his re-election campaign. China’s economy has been slowing, and US tariffs are encouraging some foreign companies to shift production or plan investment elsewhere to avoid the higher costs.