Updated at 4:05 p.m. Dec. 12.
President Donald Trump signed off on a so-called phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on about $160 billion of consumer goods from the Asian nation, according to people familiar with the matter.
The deal presented to Trump by trade advisers Thursday included a promise by the Chinese to buy more U.S. agricultural goods, according to the people. Officials also discussed possible reductions of existing duties on Chinese products, they said. The terms have been agreed but the legal text has not yet been finalized, the people said. A White House spokesperson declined to comment.
The administration has reached out to allies on Capitol Hill and in the business community to issue statements of support once the announcement is made, they said.
U.S. stocks rose and Treasury yields spiked on the news. Earlier Thursday, Trump tweeted that the U.S. and China are “VERY close” to signing a “BIG” trade deal, also sending equities higher.
“They want it, and so do we!” he tweeted five minutes after equity markets opened in New York, sending stocks to new records.
The phase-one pact has been expected to reduce existing tariffs and delay ones due to take effect on Sunday.
Trump has rejected deals with China before. Negotiators have been working on the terms of the phase-one deal for months after the president announced in October that the two nations had reached an agreement that could be put on paper within weeks.
The U.S. has added a 25% duty on about $250 billion of Chinese products and a 15% levy on another $110 billion of its imports over the course of a roughly 20-month trade war. Discussions now are focused on reducing those rates by as much as half, as part of the interim agreement Trump announced almost nine weeks ago.
A phase-one pact is expected to be built largely around a significant increase in Chinese agricultural purchases in exchange for the U.S. delaying a new round of tariffs scheduled to take effect Dec. 15 and a reduction in existing levies.
Officials have also said it will include Chinese commitments to do more to stop intellectual-property theft and an agreement by both sides not to manipulate their currencies. Put off for later discussions are knotty issues such as longstanding U.S. complaints over the vast web of subsidies ranging from cheap electricity to low-cost loans that China has used to build its industrial might.
While the White House gathering may highlight continuing divisions over whether to hit Beijing with a new wave of tariffs, Trump’s tweet suggests he may be willing to forego escalation for now.