The US and China have reached a “phase one” agreement which will ease the longstanding trade war that has reverberated throughout the global economy, paving the way for better future relations between the two nations.
US president Donald Trump said during a ceremony in Washington that the deal would be “transformative” for the US economy, while China’s leaders hailed it a “win-win” agreement.
Trump said: "Together we are righting the wrongs of the past and delivering a future of economic justice and security.
"Far beyond even this deal, it's going to lead to an even stronger world peace.”
The US-China trade war has been ongoing since 2018 and resulted in additional tariffs being applied to over $450 billion worth of goods. The ongoing discord has caused significant trade disruption and stunted economic growth globally.
Under the deal, the US has promised to halve some of the new tariffs on Chinese products, while China will increase US imports compared to 2017 levels by $200 billion. The Chinese state has also made additional commitments to reinforce intellectual property regulations and take action against counterfeiting.
However, the US will still keep up to 25 per cent tariffs on roughly $360 billion worth of Chinese goods, while China is expected to maintain most of its tariffs on $100 billion worth of products from the US.
Trump has stressed that the deal signed in Washington is very much a "phase one" agreement and that keeping tariffs in place will allow for leverage in future negotiations.
Future talks are set to cover other issues, such as China’s providing of state subsidies for its domestic businesses, which the US believes is unfair.
Chinese Vice Premier Liu He, who was president in Washington to sign the deal on China's behalf, said: "China has developed a political system and a model of economic development that suits its national reality.
"This doesn't mean that China and the US cannot work together. On the contrary, our two countries share enormous common commercial interests.”
He added: “We hope both sides will abide by and keep the agreement in earnest.”