The United States and China have agreed to a tentative trade truce ahead of the meeting between US President Trump and Chinese President Xi Jinping tomorrow (Saturday) morning on the side-lines of the G20 summit in Japan. This removes the immediate threat of another round of US tariffs imposed on a further US$300 billion worth of Chinese goods, and was apparently a condition set by Xi before agreeing to meet Trump.
The US President has warned that, although a deal this weekend is possible, he is willing to impose tariffs on virtually all remaining tariff-free Chinese goods and gradually do less and less business with China.
Trump has a number of bilateral meetings coming up at the G20, including with Australian Prime Minister Scott Morrison, Japanese Prime Minister Shinzo Abe, Indian Prime Minister Narendra Modi, and Brazilian President Jair Bolsonaro.
We will provide more details about the outcome of the meetings between Presidents Xi and Trump on Monday. Our belief is that a truce will be declared pending further talks. However, this may not resolve the underlying issue of predictability, and even should a deal later emerge, the current US administration has illustrated it is prone to changing its mind.
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