US, China forge tentative deal with big ag trade promises

1 2019 a truck passes by China Shipping containers at the Port of Los Angeles

The United States is suspending a tariff hike on $250 billion in Chinese imports as the US and China reach a cease-fire in their trade war, The Associated Press reported Friday.

But the two sides still have to tackle thornier issues around intellectual property theft and grumblings about the subsidies Beijing gives to Chinese companies.

Liu is leading the Chinese delegation to the talks, while the USA is being represented by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

On Wednesday, Trump said that there was a "really good chance" of reaching a bilateral trade deal with China.

President Donald Trump announced the trade truce in a White House meeting with the top Chinese negotiator, Vice Premier Liu He.

Trump said that they have come to a substantial phase 1 deal with China. That decision came just days before the latest talks were due to start. The president did not mention any action regarding $160 billion in tariffs set to go into effect on December 15.

CURRENCY NEWS: China's yuan rallied after reports currency pact may be included in possible interim U.S. trade war deal.

"They're trying to de-escalate", said Timothy Keeler, a former chief of staff at the Office of the U.S. Trade Representatives.

The tariffs on $250 billion in Chinese imports was set to rise Tuesday from 25% to 30%.

"And over what time frame will the $50 billion of agricultural purchases - an amount that is double our peak annual farm exports to China - take place?" Beijing has promised to do that before, however, with administration officials afterwards expressing frustration that China failed to follow through. In January, negotiations led to China purchasing more American soybeans, and tariffs were delayed further after a February meeting.

Economists say the ongoing trade dispute with China is denting economic growth in both the USA and China, along with other regions around the world. Officials familiar with the talks say possible outcomes will likely fall short of a sweeping, comprehensive trade deal that Trump has called for.

"While we are pleased that tariffs aren't going up, this agreement seemingly does nothing to address the crippling tariffs farmers now face", said Brian Kuehl, the group's co-executive director. "We had a very, very good negotiation with China. We urge trade negotiators on both sides to keep working to a full agreement that rolls back all recent tariffs so everyone sees lower costs and shoe companies can unleash innovation and create new jobs".

"For businesses this will mean less damage, not greater certainty". The White House angered Beijing on Monday when it put visa restrictions on senior Chinese officials and blacklisted 28 Chinese companies from doing business in the USA, pointing to China's persecution of its ethnic Uighur Muslim population as the reason. "Until we get a deal that ends existing tariffs, 2020 earnings visibility will remain murky, especially in light of the ongoing weakness in the global growth outlook". Still, Beijing has been reluctant to make the kind of substantive policy reforms that would satisfy Washington.