US President Donald Trump said trade negotiations with China were “back on track” after “excellent” talks Saturday with his Chinese counterpart Xi Jinping in which Washington agreed to hold off on new tariffs.

The crunch talks on the damaging trade war between the world’s top two economies came on the sidelines of a meeting of the G20 in Japan’s Osaka, with all eyes on whether the pair would agree a truce.

“We had a very good meeting with President Xi of China,” Mr Trump said after the talks. “I would say excellent.”

“We are right back on track,” he added.

Both sides were expected to issue official formal statements later, but mr Trump confirmed that Washington had committed not to impose any new tariffs on Beijing’s exports and that the two sides will continue talks. 

“At least for the time being,” Washington will not impose new tariffs or remove existing ones, Mr Trump said at a press conference after the G20 summit in Japan’s Osaka. “We will be continuing to negotiate.”

He added: “This doesn’t mean that there’s going to be a deal, but they’d like to make a deal I can tell you that. And if we make a deal it would be a very historic event.”

China and the US had signaled they were open to de-escalating the trade war between the world’s two biggest economies on the sidelines of the Group of 20 meeting in Osaka.

President Trump said relations with China had “slipped a little” but he was open to a potentially “historic” trade deal.

“I will say that this can be a very productive meeting and I think we can go on to do something that will be great for both countries,” the US President said.

China’s President Xi Jinping also signaled his support for de-escalation.

“China and the United States both benefit from cooperation and lose in a confrontation,” he told Mr Trump.

“Cooperation and dialogue are better than friction and confrontation.”

Despite the ongoing trade war, President Xi said the two nations had continued close communication through phone calls and letters and hoped to advance a relationship based on “coordination, cooperation and stability”.

Scott Morrison, speaking to SBS News, said that the trade tensions were affecting the economies of allies like Australia and Japan. 

After today’s much anticipated meeting between Xi Jinping and Donald Trump, tensions seem to have eased, but Scott Morrison said there was “still a lot more work to be done.”

“We’re a long way from where we need to be, and where we need to be is ensuring we have a modern, rules-based system to support global trade, because that’s what one in five Australian jobs depends on.”

US-China trade war

Tensions have been rising between the two global superpowers for almost a year now, with neither seeming willing to compromise.

Negotiations dissolved in May when the White House accused China of reneging on trade commitments.

The President responded by increasing tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent – further inflaming relations with China responding by raising their own levies on US imports.

The trade war has hurt both American farmers, and Chinese businesses, and sent economic ripples around the world.

Tensions also flared when the US declared Chinese telecommunication giant Huawei a security threat, effectively banning American companies from engaging in business with it and encouraging allies to do the same.

Something Australia had already responded to when it blocked Huawei equipment being used building the national 5G network.

– with AFP