On the Trump/Xi Osaka Meeting

Trump and Xi have agreed to resume trade negotiations, as expected, but markets are probably not sufficiently optimistic. This time success is more likely because the pressure on China is so much greater than before. New US tariffs are held in abeyance, but the new ones imposed a month ago are staying. There will be some relief for Huawei from a total US boycott, but the most sensitive US sales will still be banned, and the matter – including the extradition of Meng – will be held by Trump until the very end of negotiations. And additional tariffs are only suspended “for the time being.” Trump continues to be personally generous to Xi, as he has been by not mentioning the Hong Kong protests, this time by publicly assuring China of student access to US universities. This signals Trump will help Xi save face when a deal gets done.