US businesses relieved at outcome of Donald Trump-Xi G20 meeting, but note that major trade issues still loom
- Tech companies, which are among those most directly affected by tariffs and Huawei restrictions, are quick to welcome the temporary truce
- ‘It’s not about a deal. It’s about finding a reasonable process moving forward,’ an analyst says
Companies in the United States breathed a collective sigh of relief on Monday at the news that US-China trade tensions had eased at least temporarily and that prospects for a deal improved after presidents Donald Trump and Xi Jinping met in Japan over the weekend.
Investors agreed, as stocks on all three major US indices rose, with the S&P 500 hitting a record high and the tech-heavy Nasdaq gaining 1.1 per cent.
On the sidelines of the G20 meeting in Osaka on Saturday, Trump agreed not to impose 25 per cent tariffs on an additional US$300 billion worth of Chinese imports “at least for the time being”. He also said that US companies could resume sales to Chinese telecommunications giant Huawei Technologies provided these did not threaten US national security.
Even as business groups and analysts welcomed Saturday’s announcement, most noted that the hard work lies ahead as the world’s two largest economies try and find common ground on hugely difficult issues. These include intellectual property theft, industrial and government espionage, state company reform, subsidy policies, punitive tariffs and investment and trade restrictions, among others.
“They have a kind of truce and say they’re going to continue with the negotiations,” said Ho-Fung Hung, professor of political economy at Johns Hopkins University. “It’s the best people can expect. There was no significant progress in anything.”
