According to the terms of the partial deal, China has agreed to purchase between $40 billion and $50 billion worth of US agricultural products.
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. A scheduled tariff increase to 30% on some Chinese imports will not take place, Treasury Secretary Steven Mnuchin said. The Trump administration had planned next week to raise tariffs on $250 billion in Chinese goods, with another round planned to take effect on December 15 on $160 billion in imports.
The British pound jumped against the dollar, recording its biggest two-day gain since December 2008, while shares of United Kingdom banks and homebuilders advanced as investors grew more optimistic about the U.K.'s divorce deal with the European Union.
US President Donald Trump speaks during a meeting with China's Vice Premier Liu He in the Oval Office at the White House after two days of trade negotiations in Washington October 11, 2019. "At the end of the day, if the two sides were not interested in having some progress, they wouldn't even be meeting today".
"I'm unsure that calling what was announced by President Trump an agreement is justified", said Scott Kennedy, a China trade expert at the Center for Strategic and International Studies in Washington.
"We will not sign an agreement unless we get and can tell the president that this is on paper". "But there is a significant amount of work to do".
J.P. Morgan analysts said they are expecting a no-deal status quo while "market investors also have high hopes for a mini-deal". The US Treasury in August branded China a currency manipulator, accusing Beijing of deliberately weakening the yuan to gain unfair trade advantages.
Still, the agreement, which came during the 13th round of negotiations, will help to defuse trade tensions that have begun inflicting pain on the global economy and were set to escalate. In that time, the USA has targeted billions of dollars worth of Chinese goods with tariffs. Increasing foreign access to the sector is among the US demands at the trade talks. Crude oil prices rose, as did prices for key industrial metals such as copper and iron ore, often looked to as a barometer of the outlook for China's large industrial economy.
Details are still emerging, but one person familiar with the agreement said it's likely to include some U.S. tariffs relief.
The S&P 500 and Dow Jones indexes looked set to break a three-week losing streak on optimism that the world's top two economies could cool off their row before more USA tariffs kick in next week.
Beijing has been reluctant to make the kind of substantive policy reforms that would satisfy the administration.
"For businesses this will mean less damage, not greater certainty", Daco said in a research note.
Liu also praised the accord.
Previously, Trump has blamed China for backtracking on its promises. Friday's pact might reduce that slightly to 0.5 percentage point, he said.
The limited agreement is said to lay the groundwork for a comprehensive deal that Trump and Chinese president Xi Jinping could sign in mid-November when they meet on the sidelines of the Asia-Pacific Economic Cooperation leaders' summit. "It's not part of this agreement".