US President Donald Trump and China’s President Xi Jinping reached an agreement at the G20 summit in Osaka, Japan. The two world leaders agreed to resume trade talks after a long row of disagreements. But what does it mean for the global economy?
The fact that the US and China have agreed to resume trade talks means a long row contributing to a global economic slowdown could finally end.
Both US and international firms have said they are being harmed by the so-called trade war.
The International Monetary Fund (IMF) warned a trade war between the two nations risk making the world a “poorer and more dangerous place”.
It led to IMF initially lowering its forecast for global growth this year and next.
READ MORE: Juncker in world economy warning amid US-China trade war
Speaking at the summit, where representatives of the world’s top economies are gathering, President of the European Commission Jean-Claude Juncker said: “The trade relations between China and the US are difficult, they are contributing to the slowdown of the global economy.
“In our talks, both with the US and the Chinese authorities I was drawing their attention to the harmful impact this controversial matter is creating.”
The US president is meeting Mr Jinping on Saturday and hopes are now high this could bring an end to the dispute.
Mr Trump have already said he would allow American companies to continue to sell to Chinese tech giant Huawei.
This move is seen as a significant concession.
READ MORE: Huawei Android ban may be lifted – Trump lets US trade with tech giant
By doing so, Mr Trump effectively reversed a ban imposed last month by the US commerce department.
Mr Trump also confirmed his country would not be adding tariffs on $300bn (£236bn) worth of Chinese imports.
The president said that “for the time being” he would continue to negotiate with Beijing.
The fact that the trade war between the US and China reached a temporary truce is the outcome most experts anticipated.
Mark Haefele, global chief investment officer for UBS’s global wealth management business told Business Insider he would keep a positive outlook on stocks – for now.
He said: “We think the most likely outcome of the meeting will be a prolonged truce.
“We remain overweight equities, with a regionally selective approach.
“But given the risks, we also recommend counter-cyclical positions.”
Last year, the US imposed three rounds of tariffs on more than $250bn (£196bn) worth of Chinese goods.
The duties of up to 25 percent cover a wide range of products, from handbags to railway equipment.
China hit back by imposing tariffs ranging from five percent to 25 percent on $110bn (£87bn) of US products including chemicals, coal and medical equipment.