US President Donald Trump on Friday hailed a breakthrough in his drawn-out trade war with China, saying both sides arrived at an initial arrangement covering intellectual property, financial services and currencies. 

With the agreement the White House will hold off on an enormous tax increase planned for one week from now, US Treasury Secretary Steven Mnuchin told correspondents.

US and China Trade
Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He.

The president’s declaration came during a meeting with Chinese trade negotiators in the Oval Office.

“Lots of respect for President Xi,” Trump told reporters of China’s leader, Xi Jinping.“So we’ve had a tremendous really, negotiation, a very complex negotiation, but something that’s going to be great for both countries,” Trump said. 

“It’s a “tremendous deal for the farmers,” he said.

Trump said the two sides agreed on “a very substantial phase one deal,” on intellectual property, financial services and big agricultural purchases.  And in spite of the fact that the agreement still needs to pen down, he hoped to sign it with Chinese President Xi Jinping in the coming weeks.

Details of the deal are still emerging. Trump himself said specifics will be laid out over the next few weeks.

“Phase two will start almost immediately” after the first phase is signed, Trump says in the Oval Office alongside Chinese Vice Premier Liu He.

While Trump suspended tariff hike on Chinese products worth $250 billion set to kick in Tuesday, China consented to step up farm purchases. 

Trump and China president

While the limited agreement may resolve some momentary issues, a few of the thorniest questions remain. US objectives in the trade war centre on allegations of intellectual- property theft, constrained technology transfer and complaints about Chinese industrial subsidies.

It would likewise bolster Chinese protection for American intellectual property and give financial services companies more access to China’s market, the president said. 

In return, the United States won’t move forward next week with designs to raise tariff on $250 billion worth of Chinese products to 30 percent. The president has not settled on an official conclusion on whether to impose an extra round of duties on Dec. 15, as he has compromised.

Regardless of the declaration, the deal has not been finished, and Steven Mnuchin, the Treasury secretary, said that more work remained, including on the agreements identified with currency and access for American monetary organizations.

China so far has resisted from Trump’s redemands for significant changes in the management of its economy, which analysts state could politically undermine the Communist Party. 

Wall Street stocks surrendered a few gains from earlier in the day, with investors a little subdued the deal didn’t offer more.

But what this “phase one” trade deal does is expel the immediate economic pressure from the extra levies anticipated for this week, and may facilitate some of the immediate stress over the impacts of the US-China spat on the worldwide economy. 

The agreement is also intended to lay the foundation for a more considerable and extensive economic alliance with China in the coming weeks. Arbitrators are expected to meet again in five or six weeks. however Trump and Chinese President Xi Jinping may formalize this stage one arrangement when the two heads meet in Chile next month.

As he faces pressure from Congress over the Ukraine controversy, he’s appeared to be bent on than ever to demonstrate his base he’s pursuing his own agenda, regardless of whether it’s valid. Yet, in any event, for the time being, this “stage one” US-China trade deal is a beginning.