The Trump administration is suspending a tariff hike on $250 billion in Chinese imports that was set to take effect Tuesday, and China agreed to buy $40 billion to $50 billion in US farm products as the world's two biggest economies reached a cease-fire in their 15-month trade war.
President Trump says the US and China have come to a "substantial deal" on trade.
Precise details were scant, but the agreement reportedly included China's purchase of as much as $50 billion in USA agriculture products - one of the hardest-hit U.S. industries in the trade-war crossfire.
China, he said, were purchasing products worth USD 16 or 17 billion at the highest point and that would be brought up to USD 40 billion to USD 50 billion.
Mr Trump told reporters at the White House that the two sides are very close to ending the trade war and it will take up to five weeks to get the deal written.
The deal prompted the U.S. to suspend a tariff hike on $250 billion (€226.5 billion) in Chinese goods which were set to go into force next Tuesday. A 15% tariff on an additional $160 billion worth of Chinese imports is also expected to kick in on 15 December 2019.
(China's trade team is not calling the decision a "deal", but rather a pause in the 15-month long tit-for-tat tariff war).
Wall Street closed higher shortly after the agreement was announced.
The Dow Jones climbed 350 points or 1.3 percent on Friday morning following the news, while the S&P 500 rose 1.3 percent and the Nasdaq rose 1.4 percent.
There's still a lot that's not clear about what has been agreed upon that has farm industry leaders and lawmakers wanting to know more. An English translation provided by the White House indicates that Xi sent his "best wishes" to the negotiations.
"China wants it badly, and we want it also", the president said.
China has agreed to make 40-50bln United States dollars in AG good purchases.
Similarly, American Apparel and Footwear Association president and CEO Rick Helfenbein said the organization "welcomes the president's decision" but added that "the reality is that everything now being hit with punitive tariffs is still being charged". The news followed two days of talks in Washington, the 13th round of negotiations between the two countries' delegations.
Without giving further details, he said an agreement could be reached soon, with U.S. companies sharing their know-how in exchange for access to Chinese markets.
It requires that over the next two years, Chinese imports from U.S. farms will grow to an annual rate of $40 billion to $50 billion. "After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China".
In retaliation, Beijing began implementing punitive levies of between 5 per cent and 10 per cent on U.S. products valued at $75 billion, including agricultural products, crude oil and small aircraft.
The enforcement part of the deal is still being worked out, he said. USA goals in the trade war centre around accusations of intellectual-property theft, forced technology transfer and complaints about Chinese industrial subsidies.
While describing the progress as "a good thing", Sourabh Gupta, a senior fellow at the Washington-based Institute for China-America Studies, struck a note of caution, citing the twists and turns of the protracted process.