U.S. President Donald Trump has touted his meeting with Chinese President Xi Jinping at the weekend as “far better than expected” — but several trade and investment experts said Beijing appears to have gained the upper hand in the trade war.
Trump and Xi agreed at the G-20 summit in Japan to withhold from slapping additional tariffs on each other’s products as the two sides return to the negotiating table in a bid to finalize a trade agreement. In addition, Trump said he agreed to allow Huawei to purchase U.S. products and China will buy “large amounts” of American farm produce.
Washington had earlier announced a ban that restricts Huawei’s ability to do business with U.S. firms due to national security concerns. Trump’s apparently softer stance on the Chinese tech giant was seen by some observers as a major concession that the U.S. has granted China.
“It is looking like, so far, China is coming out as a winner from this G-20,” Francesco Filia, chief executive and chief investment officer at asset management firm Fasanara Capital, told CNBC’s “Squawk Box Europe” on Monday.
“It’s not even clear what they gave up in order to get it,” he said, noting there was a lack of details about what the two leaders agreed on at the meeting.
Filia is not the only one who has expressed skepticism over the U.S.-China trade developments.
Trump standing down on some of his threats to China was “one of the most concerning outcomes at the G-20,” said Danielle DiMartino Booth, chief executive of research firm Quill Intelligence.
“It looks as if he obviously gave a lot of ground back to China,” she told CNBC’s “Squawk Box Asia” on Wednesday.
Back home, both the U.S. and China governments appeared to tread Trump’s Huawei announcement with caution. A statement by China’s foreign minister on the meeting between Trump and Xi didn’t mention Huawei at all, while White House economic advisor Larry Kudlow said the president didn’t intend to grant “a general amnesty” to the Chinese tech firm.
Kudlow said Huawei remained on the so-called entity list, which largely blocks it from buying U.S. products. He added, however, that the Commerce Department will grant more licenses to allow American companies to do business with Huawei as long as the transactions don’t threaten national security in the U.S.
The lack of clarity surrounding the president’s comments on Huawei is one reason why reaction in markets following the Trump-Xi meeting “wasn’t actually that strong,” according to Eric Robertsen, head of global macro strategy and FX research at Standard Chartered Bank.
While negative risks surrounding trade have gone away for now, there wasn’t much “meaningful or tangible” outcome from that meeting between the two leaders, Robertsen told CNBC’s “Squawk Box Asia” on Wednesday.
But Suresh Tantia, senior investment strategist in Asia Pacific at Credit Suisse, said Trump’s Huawei announcement shows that “everything can be negotiated” — which is a positive development for investors.
“Whenever we’re looking at any conflict, the first step in the resolution is a truce and that’s what we have at the moment,” Tantia told CNBC’s “Capital Connection” on Wednesday.