Written by Ana Swanson
President Donald Trump said Friday that the United States had reached an interim deal with China that would forestall a tariff increase slated for next week, providing a temporary dtente in a prolonged and economically painful trade war.
Trump, speaking from the Oval Office, said negotiators had reached a Phase 1 agreement that would take several weeks to write and that both sides could officially sign by November.
If completed, the agreement would provide relief to American farmers and businesses that have been battered by the trade war. Trump said the substantial agreement would involve China buying $40 billion to $50 billion worth of American agricultural products annually, along with guidelines on how it manages its currency, the yuan.
It would also strengthen Chinese protections for American intellectual property and give financial services companies more access to Chinas market, the president said.
In exchange, the United States will not move ahead next week with plans to raise tariffs on $250 billion worth of Chinese goods to 30%. The president has not made a final decision on whether to impose an additional round of tariffs on Dec. 15, as he has threatened.
The announcement is a sharp turn from Trumps posture several weeks ago, when the president angry over Chinas retaliatory tariffs demanded that American companies stop doing business with China and threatened to tax every toy, shoe and computer from Beijing before the years end. The escalation has rattled investors, lawmakers and businesses, which have begun delaying investment and hiring amid continuing uncertainty about the trade wars trajectory.
The economic pain appears to have softened Trumps appetite for a fight. On Friday, the president said the two sides would now work on a deal in phases, a reversal from his previous position that he was looking for a complete China deal, not an interim agreement.
The first phase could be signed when Trump appears alongside Xi Jinping, his Chinese counterpart, at a meeting of global leaders in Santiago, Chile, in November. The next phase would begin soon after, Trump said.
Despite the announcement, the deal has not been completed, and Treasury Secretary Steven Mnuchin said that more work remained, including on the agreements related to currency and access for American financial companies.