US and China agree 'Phase One' deal to ease trade war
Washington and Beijing announced an initial agreement that paused escalating tariffs and committed China to major purchases of American goods.
The United States and China announced an initial trade agreement on Friday, a long-awaited truce in a tariff war that had rattled global markets and weighed on the world economy for nearly two years.
Under the so-called Phase One deal, Washington agreed to cancel a new round of tariffs that had been due to take effect and to roll back some existing duties, while Beijing committed to sharply increasing its purchases of American agricultural products, manufactured goods and energy over two years. China also pledged to strengthen protections for intellectual property and to open parts of its financial sector.
The dispute, launched when the Trump administration imposed tariffs on hundreds of billions of dollars of Chinese imports, had prompted retaliation from Beijing and disrupted supply chains and farm exports. American farmers, who lost access to a major market for soybeans and other crops, had been among the hardest hit.
Markets rose on the news, relieved that the two largest economies were stepping back from further escalation. But analysts cautioned that the agreement left the most difficult structural issues — including Chinese industrial subsidies and the role of the state in the economy — for future negotiations that might never conclude.
For businesses that had spent months delaying investment amid the uncertainty, the deal offered a measure of stability heading into the new year, even as the broader rivalry between the two powers showed no sign of fading.