China and the U.S. have agreed on the text of a phase one trade deal, which will see the removal of tariffs on Chinese goods in stages, Vice Commerce Minister Wang Shouwen said, as U.S. President Donald Trump announced some reduction in tariffs.
China will increase imports from the U.S. and other countries, Wang said at a briefing in Beijing Friday. The comments are China’s first response to a deal signed off by Trump on Thursday that would halt higher tariffs planned for Dec. 15 and represent the first phase in defusing the trade war that’s shaken the global economy.
Trump tweeted, “we have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder…”
“The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!,” according to his Twitter post.
U.S. stocks rallied, with the S&P 500 Index jumping to a record, amid signs the tensions are easing between the world’s two largest economies. Washington and Beijing have been in trade war for about 18 months involving nearly $500 billion in products shipped between the two nations.
The text, which comprises nine chapters, includes sections on intellectual property, forced technology transfer, food and agricultural products, finance, currency and transparency, boosting trade, bilateral assessment and dispute resolution, according to the officials.
Both sides agreed to finish the final stages such as legal review and translation as soon as possible and work on arrangements for the final signing, said Wang.
First announced by Trump on Oct. 11, the interim deal with China offers a short-term political victory for the president and will allow him to claim that his tariffs have paid dividends, at the risk of being accused of postponing tougher issues like China’s industrial subsidies.
For Beijing, reducing even some of the tariffs that have been imposed since last year represents a win for President Xi Jinping, who is also facing pressure to not give in to the other side.
More must-read stories from Fortune:
—These tech companies spend the most on lobbying
—Will Trump’s impeachment trial be the end for Democratic senators in the 2020 race?
—2020 Crystal Ball: Predictions for the economy, politics, technology, and more
—All the candidates who qualify for the December Democratic debate—so far
—The ‘princess’ and the prisoner: How China’s Huawei lost public support at home
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.
