US suspends tariff hike, as phase one of China trade deal reached

US and Chinese trade negotiators on Friday reached agreement on some of the key US demands, including intellectual property and financial services, producing what US President Donald Trump called phase one of a "substantial deal”, news wires reported. In exchange the US agreed to postpone a tariffs increase from 25% to 30%, set to take effect on Tuesday on billions of dollars of imported Chinese goods.

Trump said the deal had been reached "in principle" and which still must be put onto paper and signed. But he stressed that it "fully covered" some of the US demands, including trade in agricultural goods, with China agreeing to increase purchases to as much as $50bn annually within two years from about $8bn currently.

Trump provided details of the agreement to reporters at the White House after US and Chinese negotiators ended two days of talks in a process that has lasted nearly a year and triggered a trade war between the world's top two economies. The president was joined in the Oval Office by Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, who led the US negotiating team, and Chinese Vice Premier Liu He, who led the Chinese side. "We are happy about it. We will continue to make efforts," the Chinese vice premier said, adding that substantial progress was made.

The tariff hike due to take effect next week had been postponed from 1 October to 15 October last month. It would have affected $250bn in Chinese goods sold in the US. Shortly before the decision China rolled back tariffs on US pork and soybeans and exempted some chemical products from additional tariffs.

Trump, who noted that he had tremendous respect for the Chinese negotiators and for President Xi Jinping, said he viewed the agreements reached Friday as going beyond trade and tariffs and towards world peace.

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