The “worst case” trade war scenario was avoided in Osaka on Saturday when Trump agreed to restart trade talks with Xi, holding off new tariffs on Chinese exports, and signaling a pause in the trade hostilities between the world’s two largest economies;Trump added that while existing tariffs would remain in place the US president eased restrictions on Huawei as part of what is now the second ceasefire between the two superpowers in two months, removing an immediate threat looming over the global economy even as a lasting peace remains elusive.

“We had a very good meeting with President Xi of China, excellent, I would say excellent, as good as it was going to be,” he said. “We discussed a lot of things and we’re right back on track and we’ll see what happens”, Trump told reporters after an 80-minute meeting with Chinese President Xi Jinping on the sidelines of a summit of leaders of the G-20 major economies in Osaka, western Japan.

The “worst case” trade war scenario was avoided in Osaka on Saturday when Trump agreed to restart trade talks with Xi, holding off new tariffs on Chinese exports, and signaling a pause in the trade hostilities between the world’s two largest economies;Trump added that while existing tariffs would remain in place the US president eased restrictions on Huawei as part of what is now the second ceasefire between the two superpowers in two months, removing an immediate threat looming over the global economy even as a lasting peace remains elusive.

“We had a very good meeting with President Xi of China, excellent, I would say excellent, as good as it was going to be,” he said. “We discussed a lot of things and we’re right back on track and we’ll see what happens”, Trump told reporters after an 80-minute meeting with Chinese President Xi Jinping on the sidelines of a summit of leaders of the G-20 major economies in Osaka, western Japan.

“We’re holding back on tariffs and they’re going to buy farm products,” he said vaguely at a news conference, without giving any details of China’s future agricultural product purchases. “If we make a deal, it will be a very historic event.” He gave no timeline for what he called a complex deal but said he was not in a rush. “I want to get it right.”

Whereas Trump and top admin officials alleged that Beijing had reneged on provisions of a tentative trade deal, it was not immediately clear if Xi agreed to return to previous agreements as part of the new truce.

Trump, however, did relent on one of the major sticking points, saying U.S. firms would be allowed to sell components to Huawei, the world’s biggest telecom network gear maker, where there was no national security problem. The president said the U.S. commerce department would meet in the next few days on whether to take it off a list of firms banned from buying components and technology from U.S. companies without government approval.

“I like our companies selling things to other people, so I allowed that to happen,” Trump said. “We’re talking about equipment where there’s no great national security problem with it.” In recent months, the Trump administration has been lobbying allies around the world not to buy Huawei equipment, which the U.S. says could be used for Chinese espionage.

Huawei was delighted by the news on its verified Twitter account: “U-turn? Donald Trump suggests he would allow #Huawei to once again purchase U.S. technology!”

Predictably, China also welcomed the step. “If the U.S. does what it says, then of course, we welcome it,” said Wang Xiaolong, the Chinese foreign ministry’s envoy for G20 affairs.

Trump said he had not yet decided how to allow U.S. companies to continue selling to Huawei or whether to remove the tech giant from the Commerce Department’s entity list. He said he would meet with advisors next week to determine how to proceed.

U.S. microchip makers also applauded the move. “We are encouraged the talks are restarting and additional tariffs are on hold and we look forward to getting more detail on the president’s remarks on Huawei,” John Neuffer, president of the U.S. Semiconductor Association, said in a statement. Recently, Broadcom warned of a broad slowdown in demand as a result of Huawei sanctions and slashed its revenue forecast.

And yet, it was not clear how long the exemption would last. Trump said he had agreed with Xi to wait until the very end of trade talks to resolve broader issues around Huawei, including Washington’s lobbying campaign against allies buying its 5G equipment.

“Huawei is a complicated situation,” Trump said. “We’re leaving Huawei toward the end. We’ll see where we go with a trade agreement.”

The concession will likely draw criticism in Washington where national security hawks have urged Trump not to ease any pressure against Huawei. The company has long been the target of concern at the Pentagon and intelligence agencies in part over what the U.S. claims are its close ties to the Chinese military.

Read more via ZeroHedge.com