US-China trade negotiations are now headed in a positive direction following this weekend's meeting between President Donald Trump and his Chinese counterpart Xi Jinping, a top White House aide said Tuesday.

But trade advisor Peter Navarro said Chinese telecoms giant Huawei remains blocked from participating in the development of 5G wireless networks in the United States even though Washington has softened its stance toward the company.

"We're reengaged. We're talking on the phone already. There will probably be visits. It's all good," Navarro told CNBC. "From an investor's point of view, here is all you have to know: Talks are back on track with the work that has been done to date."

The US trade delegation has been led by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

After talks nearly collapsed in May, Trump and Xi on Saturday agreed at a meeting in Japan to resume negotiations toward ending their year-long trade war.

Trump accused the Chinese side of reneging on commitments made during the talks and jacked up duty rates on a $200 billion tranche of Chinese imports.

Markets were encouraged by Saturday's developments, which averted further deterioration in a trade conflict already weighing on the global economy.

Stocks were struggling on Tuesday, in part because Washington threatened heavier tariffs on European goods in a dispute over subsidies to aircraft maker Airbus.

And the tariffs put in place since last year by both Washington and Beijing -- which currently cover more than $360 billion in two-way trade -- remain in place.

Navarro said a 150-page document developed during the US-China trade talks since December remained the basis of discussion.

He also said all that was at issue in Saturday's agreement on Huawei was "a small amount of chips" with negligible implications for spy craft.

"President Xi requested some relief on Huawei," he said. "Here is the important thing: US policy on Huawei with respect to 5G in this country has not changed."

"All we've done, basically, is to allow the sale of chips to Huawei. These are lower tech items which do not impact national security whatsoever," he added.

Trump triggered a backlash on Capitol Hill over the weekend by agreeing to soften some US export restrictions on crucial components to Huawei.

US officials say Beijing exploits Huawei for espionage. However Trump stipulated that officials would take care to avoid creating new risks to national security.

US-China dialogue resumes but major hurdles remain
Washington (AFP) July 1, 2019 - China and the United States have agreed to resume trade negotiations but the apparent thaw in relations can scarcely mask the genuine hurdles that remain before a final agreement can be reached.

Striking a bargain with China is "extremely -- I wouldn't even say complicated but very intricate," US President Donald Trump said Saturday on the sidelines of the Group of 20 summit in Japan, where he announced the resumption of talks.

- Tariffs -

Beijing wants the hundreds of billions of dollars in US tariffs imposed last year to be lifted. But the Trump administration has insisted on maintaining this as leverage, at least partly, to help make any final deal stick.

To get talks started again, Trump said in Japan he would not impose any new tariffs on Chinese imports -- "at least not for the time being" -- but would not lift any either.

Currently, Washington has slapped tariffs on $250 billion in Chinese exports, a little less than half of everything that Americans buy from China each year. China, which buys less, has responded with retaliatory duties on $110 billion in US exports.

- Huawei -

The race for dominance in high technology is perhaps the thorniest matter in the two sides' dispute and shows the high stakes they are playing for.

US officials believe China exploits the telecommunications equipment produced by China's Huawei, the world's second-largest maker of smartphones, for espionage, something the company rejects.

In May, Trump blacklisted Huawei, barring US companies from selling it badly needed components. But over the weekend, the president signaled a softer position, saying companies would be allowed to resume those exports "where there's no great national security problem."

So far the administration has not specified which exports would be permissible. And Trump said resolving the matter conclusively would be a question for the end of the trade talks.

- Political obstacles -

Multiple US lawmakers, including Republican Senator Marco Rubio of Florida, are opposed to any loosening of restrictions.

In China, Xi Jinping must contend with senior Communist Party figures and the leaders of state enterprises who accuse Washington of an attempt to destroy China's economic model, which has seen it grow into the world's second-largest economy.

- Structural changes -

Washington is demanding that Beijing end massive state intervention in markets and the forced transfer of American companies' technological know-how.

In May, Trump accused Chinese negotiators of backsliding on commitments they had already made during trade talks, resulting in a breakdown in negotiations and a steep increase in duties on Chinese imports.

Trump reiterated on Saturday that he wanted "to get the deal right" and was in no hurry to accept a substandard bargain. But Beijing has not said it is ready to change the trade practices at the heart of the impasse.

- Agriculture -

In return for suspending new tariffs, Washington says it won a commitment from China to buy more US farm exports.

The farm sector, which Trump has celebrated, has been hardest hit by the trade war. Soy exports to China, a market on which US farmers had come to depend heavily, fell 75 percent last year to just $3.1 billion.

Trump has announced taxpayer bailouts for farmers ($12 billion last year, with another $16 billion announced in May). But discontent is growing, just as Trump gears up to seek reelection next year.

"China is going to be buying a tremendous amount of food and agricultural product," Trump said, adding the American farm sector would be "a tremendous beneficiary."

"We're going to give them lists of things that we'd like them to buy."

- Investments -

As a gesture of good will, China announced Sunday that effective immediately it would soften some restrictions on foreign investment in sectors such as maritime transportation and some telecommunications services as well as oil and gas exploration.

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Trump says US-China trade talks 'already begun'
Washington (AFP) July 1, 2019
US President Donald Trump said Monday that talks on a trade deal with Beijing have resumed following a weekend truce struck with China's Xi Jinping on the sidelines of the Group of 20 summit. Trump and Xi agreed Saturday to hold off on new tariff increases as the world's top two economies negotiate a final agreement to resolve their year-long trade war. Trump also offered to relax some restrictions on US technology exports to Chinese telecoms giant Huawei, triggering a backlash from some US lawm ... read more