President Trump and President Xi of China meeting during the G20 summit last month has been one of the most anticipated events in global politics and economy this year. The meeting could go either way and its outcome could decide the fate of the global economy for the coming months. Fortunately, for most stakeholders, the meeting ended in the most anticipated manner with both countries agreeing on not imposing any further tariffs on each other’s products. Both leaders also agreed on sitting down on the table to reach a trade agreement for the future.
The meeting of G20 went “far better than expected” in words of Donald Trump. It may appear so as both countries decided to not escalate the situation further and work towards reaching a consensus. However, some experts see it as China coming out of the meeting in a much better position than the United States.
In exchange for allowing Huawei to conduct business with American firms, President Trump told that China has agreed to buy large quantities of American farm produce.
Research firm Quill Intelligence’s CEO, Danielle DiMartino Booth, feels that the US is giving “a lot of ground back to China” with this decision. Similarly, Francesco Filia, CEO of Fasanara Capital, an asset management firm, sees China as the clear winner in G20 summit.
President Trump’s decision to allow American companies to sell products and services to Chinese tech giant Huawei is the biggest breakthrough for China in this whole drama. Experts and observers see this as a substantial concession by the US to China.
Both American and Chinese spokespersons have been dealing with the issue of Huawei with great caution while speaking to press. A recent press briefing by the foreign minister of China regarding this important meeting did not mention Huawei at all. On the other hand, Larry Kudlow, economic advisor at White House, told media that the US did not allow “a great amnesty” to Huawei and the tech giant will remain on ‘entity list’.
In spite of encouraging outcome of the meeting, however, the market did not react very strongly to these announcements. Lack of clarity regarding exact status of Huawei and not enough comments by both countries about this important issue could be the main reason behind such reaction of the market, as per Eric Robertsen, Global Head for FX and macro strategy at Standard Chartered Bank.
More statements from both countries are expected in the coming weeks, which may help in clearing the matter further.