Donald Trump Announces "Very Substantial" Partial China Trade Deal

Both China and the US have scheduled further tariff increases for December and Europe is considering retaliation against any US action

Both China and the US have scheduled further tariff increases for December and Europe is considering retaliation against any US action

In their two-day talks, which concluded Friday in Washington, the two sides achieved substantial progress in areas including agriculture, intellectual property rights protection, exchange rates, financial services, expansion of trade, technology transfers and mechanisms for dispute settlement.

But more progress will have to be made on key differences in later negotiations, including U.S. allegations China forces foreign countries to hand over trade secrets in return for access to the Chinese market.

China's vice-premier, Liu He, is leading the delegation in negotiations with the United States trade representative, Robert Lighthizer, and the treasury secretary, Steven Mnuchin.

"As we have said throughout this trade war, we do not believe continuing to tax Americans gives us leverage at the negotiating table with China, and it is past time that these misguided tariffs were removed", he added.

President Trump - seated in the oval office surrounded by top negotiators from China and the US - announced the two sides had reached a partial trade deal Friday.

Observing that U.S. -China relations are enjoying strong growth, Trump said he has great respect for China and great respect for Xi, who is a great leader.

President Trump says the US and China have come to a "substantial deal" on trade. "Warmer feelings than in recent past, more like the Old Days".

The US and China have imposed tariffs on billions of dollars worth of each other's goods over the past 15 months, casting a pall over the global economy. Reportedly, the two countries have come to a preliminary deal to make things work better.

"They're trying to de-escalate", said Timothy Keeler, a former chief of staff at the Office of the U.S. Trade Representatives.

Stocks were sharply higher across the board.

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The tariffs on $250 billion in Chinese imports was set to rise Tuesday from 25% to 30%. Beijing has promised to do that before, however, with administration officials afterwards expressing frustration that China failed to follow through.

The report made no mention of any willingness to discuss Chinese industrial and technology policy.

Details are still emerging, but one person familiar with the agreement said it's likely to include some United States tariffs relief.

Trump has long said he would not sign an incremental deal that did not meet a long list of demands.

"It's critical to remember that all existing tariffs are expected to remain in place", said Alec Young, managing director of global markets research at FTSE Russell.

Over the past year and a half, the US and China have imposed new duties on billions of dollars in imports coming from either country.

Trump's comments were preceded by an announcement from China's securities regulator containing a timetable for removing a requirement on foreign financial companies to have a Chinese investor.

"After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China", the Iowa Republican said.

"For businesses this will mean less damage, not greater certainty", Daco said in a research note.

Also agreed on currency and FX issues.

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