‘It’s a temporary timeout': Trump and Xi agree to negotiations, but offer no clear path to end US-China trade war – CNBC

The United States and China have been here before.

After threatening to impose potentially devastating tariffs, President Donald Trump pulled back in the wake of talks with Chinese President Xi Jinping at the G-20 summit in Japan on Saturday.

Trump and Xi, who both tout their strong personal relationship, reached a similar agreement at the previous G-20 summit in Argentina at the end of the last year.

But those talks ultimately failed and tariffs today are much higher than they were even as recently as early May.

And if history is any guide to the future, the gentlemen’s agreement struck between the leaders of the world’s two largest economies over the weekend in Osaka offers no clear path to rolling back tariffs and ending a trade war that threatens to tip the global economy into recession.

“It’s a temporary timeout,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, told CNBC. “I don’t see any path to a deal and we’re stuck with 25% tariffs on $250 billion of goods.”

Boockvar isn’t alone. The Eurasia Group, for its part, sees only a 45% chance that a trade deal gets done this year.

And Trump is seemingly in no rush. Before sitting down with Xi on Saturday, the president made clear in an interview with Fox Business News that while he believes a deal is possible, he feels no urgency to lift tariffs.

“I’m also very happy with where we are now, ” Trump said. “We’re taking in a fortune, and frankly [it’s] not a very good thing for China, but it is a good thing for us. “

The business community by and large disagrees.

More than 600 U.S. companies, including Target and Walmart, had urged Trump not to impose additional tariffs, warning that such a move could cost 2 million American jobs.

And while business groups Saturday welcomed the renewed talks, they made clear they’re still anxiously waiting for a final deal. According to Boockvar, there’s little reason to celebrate.

“If I’m a CEO, waiting on how this weekend was going to go, do I feel any better? If I’m in manufacturing, maybe I feel a touch better it’s not worse in the short term, but I still have to deal with this 25% tariff and the threat of more tariffs hanging over,” he said.