U.S. President Donald Trump and Chinese President Xi Jinping called a truce at a high-stakes meeting on Saturday night on the sidelines of the Group 20 summit in Argentina. The two countries have come to an agreement to postpone a planned tariff hike on Chinese goods for three months in return for greater purchases of American goods.The arrangement gave a breathing space to both leaders as they face declining stock markets and economic warning signs.
The Trump administration had downplayed the potential for any deal during the meeting, and this announcement was the first strong signal of restraint in America’s escalating pressure campaign against Chinese trade, market access, and intellectual property practices. The two governments have considerably different approach in assessing the agreement, reports and markets and were optimistic about the truce on the nations’ so-called trade war.
On the same day as President Trump and President Xi dined, Meng Wanzhou, the chief financial officer of Huawei and a daughter of the company’s founder, was arrested in Canada and is now facing extradition to the U.S by the Canadian authorities. Her arrest occurred following the U.S accusation to Huawei to conduct violation for selling technology to Iran. The U.S. government claimed that this is causing serious threat to U.S. national security. The Chinese government is clearly disappointed about Meng’s arrest. The Foreign Ministry urged the U.S. and Canada governments to immediately rectify the misconduct and restore freedom to Meng.
While President Trump continues to coerce China to comply to its “Made in China 2025” policy in stopping the development of its strategic sectors including artificial intelligence and robotics, the rising situation on Meng’s arrest will certainly lead to higher tension between the two leading world economy nations and aggravates the on-going Cold War. As a result of Meng’s arrest catalyst, it is highly expected that the initial level of optimism in the market will plunge into quick loss of confidence, impacting on the fall of the stock market prices.
Source:
Bloomberg
The New York Times
CNN Business
BBC News
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