China and the US agreed on the text of a phase one trade deal that includes the removal of tariffs on Chinese goods in stages, Vice Commerce Minister Wang Shouwen said, as President Donald Trump confirmed that some levies will be reduced and said the next round of talks will start immediately.
China will increase imports from the US and other countries, Wang said at a briefing in Beijing Friday. Vice Chairman of the National Reform and Development Commission, Ning Jizhe, added that the specifics of agricultural purchases would be released later, as the text of the agreement is still under review.
The comments were China's first response to a deal signed off by Trump on Thursday that would halt higher tariffs planned for Dec. 15 and represent the first phase in defusing the trade war that's shaken the global economy.
Trump tweeted, "we have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder..."
"The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!," according to his Twitter post.
US stocks initially rallied, with the S&P 500 Index jumping to a record, but were little changed after the announcements. The world's two largest economies have been in a trade war for about 18 months involving nearly $500bn in products shipped between the two nations.
The deal text, which comprises nine chapters, includes sections on intellectual property, forced technology transfer, food and agricultural products, finance, currency and transparency, boosting trade, bilateral assessment and dispute resolution, according to the officials.
Both sides agreed to finish the final stages such as legal review and translation as soon as possible and work on arrangements for the final signing, said Wang.
An interim deal
First announced by Trump on October 11, the interim deal with China offers a short-term political victory for the president and will allow him to claim that his tariffs have paid dividends, at the risk of being accused of postponing tougher issues like China's industrial subsidies. Unfolding along with the trade news on Friday was the House Judiciary Committee's recommendation to impeach Trump.
For Beijing, reducing even some of the tariffs that have been imposed since last year represents a win for President Xi Jinping, who is also facing pressure to not give in to the other side.
"Without doubt, to implement the agreement, our imports of American agricultural goods will increase significantly," Vice Agriculture Minister Han Jun said.