Trump and Xi Agree to Restart Trade Talks, Avoiding Escalation in Tariff War
OSAKA, Japan — President Trump and President Xi Jinping of China agreed on Saturday to resume trade talks after a seven-week breakdown, averting for now an escalation of their multibillion-dollar tariff war that has roiled global markets and threatened the future of the world’s two largest economies.
The agreement, brokered during more than an hour of discussion between the leaders, did not by itself signal any major breakthrough in resolving the fundamental conflict. But it represented a temporary cease-fire to give negotiators another chance to forge a permanent accord governing the vast flow of goods and services between the two nations.
“We discussed a lot of things, and we’re right back on track,” Mr. Trump told reporters after his session with Mr. Xi on the sidelines of the annual summit meeting of the Group of 20 nations in Osaka, Japan. “We had a very, very good meeting with China,” the president added, “I would say probably even better than expected, and the negotiations are continuing.”
Mr. Trump promised to hold off on his threat to slap new 25 percent tariffs on $300 billion in Chinese imports, and he agreed to lift some restrictions on Huawei, the Chinese technology giant at the center of a dispute between the nations.
In exchange, he said, China agreed to buy a “tremendous amount” of American food and agricultural products. “We will give them a list of things we want them to buy,” he said.
Even as he returned to the negotiating table with China, Mr. Trump pursued a surprise initiative to lure North Korea’s leader, Kim Jong-un, back into talks, as well. In response to his Twitter invitation to meet on Sunday at the Demilitarized Zone dividing North and South Korea, the president said Mr. Kim “was very receptive,” and the two sides scrambled on Saturday to see if they could arrange such an encounter at the last minute.
“I understand we may be meeting with Chairman Kim,” Mr. Trump told reporters. “We won’t call it a summit. We’ll call it a handshake.” Asked if he would be willing to cross over the line into North Korea for that handshake, he said: “Sure I would. I feel very comfortable doing that. I would have no problem.”
For Mr. Trump, who loves the theater of international affairs and relishes unpredictability, such a head-snapping turn of events would be the capstone to an eventful trip to Asia. He has juggled a variety of high-stakes disputes over security, economics and other issues, while keeping an eye on the emerging Democratic presidential campaign back home.
His wrap-up news conference before leaving Osaka for Seoul was a quintessential Trump performance. He roamed widely, sometimes in free association, weighing in not just on Asian issues, but also on the border situation at home, various court battles and his economic record. And for good measure, he threw in an unprovoked jab at Hillary Clinton, still his favorite punching bag.
Mr. Trump also left behind a stink bomb for his host, Prime Minister Shinzo Abe of Japan, divulging that he had told the premier that the 68-year-old Japanese-American defense treaty, which has long been the foundation of the relationship between the two nations, should be overhauled. It is, in his view, not fair to the United States. “I told him, ‘We’ll have to change it,’” he said.
A meeting with Mr. Kim, following two others in the past year over his nuclear arsenal, would not be his only session with an authoritarian ruler during his visit to the region. During his news conference on Saturday, he defended his approach to meetings with President Vladimir V. Putin of Russia and the Saudi crown prince, Mohammed bin Salman.
He issued a particularly strong defense of Prince Mohammed, all but exonerating him in the murder and dismemberment of Jamal Khashoggi, the Saudi dissident and columnist for The Washington Post.
“Nobody has directly pointed a finger” at the crown prince, Mr. Trump said, ignoring the fact that American and international intelligence agencies have done just that. His own C.I.A. has determined that Prince Mohammed ordered the killing, and a United Nations investigator found credible evidence to make a similar conclusion.
Instead, Mr. Trump indicated that he accepted the crown prince’s explanation that the Saudi government was prosecuting those who committed the murder. “A lot of people are being prosecuted, and they’re taking it very seriously there,” the president said. He asserted that Prince Mohammed was upset over the murder. “He’s very angry about it,” Mr. Trump said. “He’s very unhappy about it.”
As for Mr. Putin, he again brushed off the intelligence agencies’ conclusion that Russia had interfered in the 2016 election on his behalf. A day after making light of it by jokingly telling Mr. Putin in front of cameras “don’t meddle in the election,” Mr. Trump dismissed criticism that he was not taking it seriously enough. “I did say it,” he argued.
He said the issue came up in his private conversation with Mr. Putin, but noted that the Russian leader had again denied it, an assertion with which he did not publicly quarrel. Indeed, Mr. Trump said he might accept an invitation by Mr. Putin to visit Moscow next spring for the 75th anniversary of the end of World War II.
He also tried to smooth over a rift with President Recep Tayyip Erdogan of Turkey about his country’s purchase of S-400 missile defense systems from Russia. Mr. Trump blamed President Barack Obama’s administration for the dispute and acknowledged that he might have to impose sanctions required by law, but said he hoped to avoid that.
“It’s a problem, there’s no question about it,” Mr. Trump said with Mr. Erdogan at his side as the two prepared to meet behind closed doors. “We’re looking at different solutions.”
But the talks with China, with so much at stake for both sides, were the centerpiece of the trip.
The latest pause in the trade war seemed to be a repeat of sorts of what happened at the last G20 summit meeting, in December in Buenos Aires. There, Mr. Trump and Mr. Xi also met and agreed to postpone further tariffs pending negotiations and more soybean purchases by Beijing. The question is whether the new opening will yield any better result.
The “two sides are highly harmonious, and the areas of cooperation are broad,” Mr. Xi said, according to The People’s Daily, an official Chinese news outlet. “They should not fall into the trap of so-called conflict confrontation, but should promote each other and develop together.”
The biggest question over Saturday’s deal involved what exactly Mr. Trump had agreed to do for Huawei, which the United States has called a security threat. Mr. Trump said that he would allow more sales of American components to the telecom giant, and that the Commerce Department would soon review its legal measures restricting these exports.
But Mr. Trump did not say what would happen to pending Justice Department actions against the company and one of its executives, both of whom have denied wrongdoing.
Trade talks collapsed in May when China’s leadership became uncomfortable with many provisions in the draft text of a deal. Particularly contentious were draft provisions calling for China’s legislature to enact many amendments to Chinese laws.
The United States had insisted on the amendments as a way to make it more likely that Chinese government agencies would abide by promises made by Chinese negotiators. But a nationalistic backlash within the Chinese government prompted Chinese negotiators to send a new version of the draft agreement to American negotiators that deleted extensive passages.
Trade talks then broke down a week later, and Mr. Trump responded by raising tariffs on $200 billion a year in Chinese imports. He also threatened to slap 25 percent tariffs on another $300 billion a year worth of American imports from China. Beijing retaliated with its own tariffs.
Scott Kennedy, a China specialist at the Center for Strategic and International Studies in Washington, said resuming trade talks and pausing further American tariffs still left the two sides with broad differences. In parallel with raising tariffs over the past year, the Trump administration has also imposed ever tighter limits on the sale of American high-tech products to China and on Chinese investment in the United States.
“They are more likely to continue going around in circles rather than reaching the destination of a real deal,” Mr. Kennedy said. “Neither side looks ready to compromise; meanwhile, the tech war will continue to intensify. This is a truce on only one front of the wider conflict.”