In one potentially controversial area, Trump said he wanted to loosen a trade ban that was recently imposed on Huawei because of national security concerns. | Tomohiro Ohsumi/Getty Images G-20 POLITICO Pro's G-20 Report: Huawei to get a break as China trade talks resume

With help from Anita Kumar, Kristin Huang, Catherine Wong and Liu Zhen

This newsletter is a joint production of POLITICO and the South China Morning Post.



QUICK FIX




— President Donald Trump avoided an escalation of the tariff war with China and even said he would relax restrictions on U.S. companies selling to telecommunications giant Huawei.

— Europe and China hit back against Trump’s attempts to further undermine the Paris climate agreement, ensuring that the U.S. is the only country opting out in the final communiqué issued by G-20 leaders.

— G-20 leaders issued a watered-down call for reform of the World Trade Organization, dropping language saying the issue should be urgently addressed.

World leaders are leaving the G-20 today with little to show for the three days they spent in Osaka. Though the U.S. and China reached a détente, the larger group failed to move forward on WTO changes or on carbon reduction targets. Trump’s now heading off to the Korean peninsula — after issuing a Twitter invitation to North Korean leader Kim Jong Un to meetup in the Demilitarized Zone to shake hands and say “hello.” No word yet on whether Kim will accept.

Sayonara: This is it from your team from POLITICO Europe, POLITICO and the South China Morning Post. We’ve certainly enjoyed it. See you again soon.



DRIVING THE DAY



U.S.-CHINA TRADE TALKS RETURN FROM HIATUS: Negotiations aimed at resolving a damaging trade war between the world’s two largest economies are “right back on track,” Trump declared Saturday after a meeting with Chinese President Xi Jinping. The talks had been on hold for nearly two months after Trump accused the Chinese of changing their mind about some things they had previously committed to do.

Trump told reporters that a 25 percent tariff on $250 billion worth of Chinese goods would stay in place. But he agreed in the meeting with Xi that he would not impose a 25 percent duty on another $300 billion worth of Chinese goods, as he previously intended to do. For its part, China agreed to step up purchases of U.S. farm goods and other products. Trump didn’t mention any specific volume of purchases, but said the U.S. side would give China a list of goods to buy.

A reprieve for Huawei: The White House did not issue a fact sheet on what the two sides agreed, opting to leave that to Trump to explain in a nearly 75-minute press conference. In one potentially controversial area, Trump said he wanted to loosen a trade ban that was recently imposed on Huawei because of national security concerns.

Trump indicated he thought the ban was too restrictive because Huawei is a major customer for many U.S. technology firms. In another area, Trump indicated he wanted to reform immigration policy to make it easier for Chinese students to work and stay in the United States after they complete their education.

A top Chinese official sent to brief the Chinese press in Osaka declined to offer details on Trump’s Huawei announcement. “If they do it, we will certainly welcome it,” said Wang Xiaolong, the director general of the Department of International Economic Affairs of the Foreign Ministry.

Timeline TBD: Neither side released details on a deadline for completing the negotiations or when U.S. Trade Representative Robert Lighthizer would next meet with Chinese Vice Premier Liu He. Both chief negotiators were part of the U.S. and Chinese delegations in Osaka. Read more details on POLITICO Pro .

THE CLIMATE LEVEES HOLD: It went down to the wire, but Europe and China fought off a big push by Trump to water down global climate ambitions. The U.S. had wanted Brazil, Australia, Turkey and Saudi Arabia to join Washington in rowing back on the Paris climate accord. In the end the G-20 was reduced, yet again, to the 19+1 format, in which the U.S. kept a special carve-out. Two senior EU negotiators said they had fought with the United States over the climate chapter until 4 a.m. on Saturday, when they decided to pause talks as they saw no way out of the deadlock. Around 11 a.m., things started moving again as lower-level officials handed over the baton to heads of state.

Green allies: Europe’s tussle against the U.S. was helped by the fact that the Chinese, for whom pollution is a hugely sensitive political issue, rallied to the climate call. China’s Foreign Minister Wang Yi, and his French counterpart Jean-Yves Le Drian said they “agreed on the importance for all countries to fully fulfil their commitments in the UNFCCC and the Paris Agreement to the letter,” in a statement . Both countries promised to increase their emission reduction targets and said they would “publish their long-term mid-century low greenhouse gas emissions development strategies by 2020.”

G-20 DECLARATION TONES DOWN CALL FOR WTO REFORM: G-20 leaders agreed on the need for WTO reform, but the final declaration seems less alarmed about the current world situation than an earlier draft seen by POLITICO. That version said the rules-based multilateral trading system was at “a critical juncture, facing unprecedented challenges.” It also called for “a sense of urgency” in pursuing reform in the lead-up to the Twelfth WTO Ministerial Conference in Kazakhstan next year. The final version drops that language in favor of a more measured tone.

Another section calling on countries to “fight protectionist practices that impede fair competition” was also expunged, apparently at the insistence of the United States.

One sentence that did survive concerned the ongoing crisis over the WTO’s dispute settlement system as a result of the U.S. blocking the appointment of new appellate body judges. The final language seems to reflect U.S. concern that the appellate body has exceeded its mandate by making new international law. Reflecting that, the G-20 leaders agreed “that action is necessary regarding the functioning of the dispute settlement system consistent with the rules as negotiated by the WTO Members.”

TRUMP CALLS PELOSI ON USMCA: Trump had 19 other world leaders to talk to over the past several days. But he took time out of his schedule Friday night in Osaka to make a phone call to the person who holds the fate of the U.S.-Mexico-Canada Agreement in her hands: House Speaker Nancy Pelosi . “I said view this as a bipartisan deal because a lot of the Democrats want it,” Trump said at his press conference.

Trump did not indicate whether he plans to formally submit implementing legislation for USMCA in coming days. Democrats have said that would be premature because of concerns they have about labor, environment, pharmaceutical and enforcement provisions of the pact. Trump did express confidence Congress would pass the agreement. “I think you’ll get a great vote” in both the House and the Senate, he said.

TRUMP SEES ‘FANTASTIC’ TRADE POTENTIAL WITH RUSSIA: The U.S. leader also said he was keen to explore opportunities for increased trade with Russia. “They have great product, great land. They have very rich land. They have a lot of oil, a lot of minerals and the things that we like,” Trump said.

Two-way U.S. trade with Russia has bounced back in recent years to about $26 billion in 2018. But it still remains below the levels reached prior to Moscow’s military intervention in Ukraine and its annexation of Crimea. Trump did not say whether he discussed lifting U.S. sanctions on Russia when he met with Russian President Vladimir Putin on Friday at the G-20 summit.

TRUDEAU RAISES ISSUE OF DETAINED CANADIANS WITH XI, BUT RELATIONS STILL FROSTY: It doesn’t appear that Canadian Prime Minister Justin Trudeau made any headway with Xi in securing the release of two Canadians imprisoned in Canada.

The contact between the two was the first since diplomatic and trade relations turned sour since last December when Canadian police arrested Huawei’s Chief Financial Officer Sabrina Meng Wanzhou on a U.S. extradition warrant.

China has charged Michael Kovrig and Michael Spavor with spying, a move widely seen by those outside China as retaliation for Meng’s arrest.

Trudeau described talks with Xi as constructive but, video footage appeared to show frosty interactions. During a lunch on Friday, Trudeau and Xi did not shake hands or look at each other and did not engage in conversation even though they sat next to each other thanks to alphabetical seating. Canadian reports said there was no interaction because Xi’s translator was not with him at that time.

In the evening, just before the culture performance was about to start, Trudeau and Xi were seen talking briefly with each other.

MEGA TRADE DEAL: The Europeans in Japan were keen to parade their newly minted trade deal — their biggest — with the Mercosur bloc of Brazil, Argentina, Paraguay and Uruguay. The “Mercosaurus” finally hatched on Friday night in Brussels, after 20 years of stop-start talks. Here’s a video of the big moment .

THAT'S ALL FOR THE G-20 REPORT! See you again soon! In the meantime, drop the team a line: [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected].

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