The U.S. reached a limited trade agreement with China Friday afternoon that would pave the way for resolutions on broader issues later in the year. BusinessInsider.com said the deal temporarily defuses a dispute between the worlds’ two largest economies. President Trump told reporters in the Oval Office that, “We’ve come to a very substantial phase one deal.” China reportedly agreed to sginificantly increase agricultural purchases, as much as $40-50 billion worth. China also agreed to certain intellectual property measures, as well as concessions related to financial services and currency. The U.S. will delay a tariff increase that was set to take effect this week as the deal is finalized.
China had already been making more purchases of agricultural goods like soybeans and pork heading into the talks last week in Washington, D.C. The U.S. was threatening to increase tariffs Tuesday on approximately $250 billion worth of Chinese goods, upping the duties from 25% to 30%.
The agreement will take three to five weeks to get written down on paper.
It marks the first breakthrough in the 1.5-year trade war that has hurt the economies of both nations. Trump also told reporters that this is just the first phase of a broader agreement. It’s important to note that the Chinese Vice Premier doesn’t have the full authority to approve the agreement. China’s President Xi Jingping must agree to the deal as well.
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