Nearly two weeks after United States President Donald Trump and his Chinese counterpart Xi Jinping met on the sidelines of the Group of 20 summit in Osaka to revive stalled trade talks, their trade teams made contact, by phone – their first since negotiations stalled in May. But in a sign that progress is not going to be easy, White House economics adviser Larry Kudlow said after last Tuesday’s phone contact that there was no magic way towards a deal, and that “I don’t know yet” if the two sides can pick up where they left off. China’s Commerce Ministry said only that both sides “exchanged views” on implementing what was agreed by the two leaders. In a worrying development for the US, the Chinese have included Commerce Minister Zhong Shan, a known hardliner who was not previously on the negotiating team, in the talks. Neither side said when they might meet face to face, and the Americans did not have firm commitments from the Chinese to buy farm produce that Mr Trump asked for.

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But this does not mean there has been no improvement in the situation. At the very least, both leaders, in agreeing to a truce and to re-start talks, lowered temperatures a notch in a trade war that has been costly for markets, trade and economic growth. There was also a collective sigh of relief that the US did not carry out its threat to impose tariffs on US$300 billion (S$407 billion) worth of Chinese imports, which would have dampened global sentiment further. Washington also eased restrictions on tech companies selling products to Chinese tech giant Huawei, which paved the way for renewed talks. Still, with no deadline set for reaching a deal, it appears both sides are taking it slow.