The US and China have agreed to resume trade talks, easing a long row that has contributed to a global economic slowdown.
US President Donald Trump and China’s President Xi Jinping reached agreement at the G20 summit in Japan.
Mr Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession.
Mr Trump had threatened additional trade sanctions on China.
However, after the meeting on the sidelines of the main G20 summit in Osaka, he confirmed that the US would not be adding tariffs on $300bn (£236bn) worth of Chinese imports.
And at a subsequent press conference, the US president declared that US technology companies could again sell to China’s Huawei – effectively reversing a ban imposed last month by the US commerce department.
The resumption of talks and pressing the pause button on more tariffs will be seen in the short term as positive for markets and American businesses. Those have already complained about the cost of further tariffs saying that if they had gone ahead – American consumers would have ended up paying something like $12bn more in higher prices
Washington wants Beijing to fundamentally change the way China’s economy has grown over the past four decades – get rid of subsidies to state owned companies, open up the domestic market and most importantly, hold China to account if it fails to deliver on any of these commitments.
But Beijing has already publicly said that it won’t budge on issues of principle or bow to US pressure.
How the two sides close that gap will be the real test of any trade truce. For now – it is a positive thing that they’re talking again. But talking can only take you so far.
Where next for the G20?
The next summit is due to be held in Saudi Arabia in November 2020.
Crown Prince Mohammed bin Salman has continued to face questions in Osaka over the murder in Istanbul last year of Saudi journalist Jamal Khashoggi and the matter is likely to rumble on.
The UK’s Theresa May and Turkey’s Recep Tayyip Erdogan are among those still pressing the issue, although Mr Trump says “no-one blames” the crown prince.