In a clear effort to defuse escalating tensions between the world's two largest economies, Chinese and US officials have agreed to avoid a trade war and end the imposition of tariffs on billions of dollars worth of each other's goods.
After rounds of negotiations in Washington that ended on Saturday, the two sides also agreed to take measures to "substantially" reduce the US trade deficit with China and strengthen cooperation on the protection of intellectual property - core issues at the heart of the trade dispute, according to a joint statement.
"To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of US goods and services. This will help support growth and employment in the US," the statement read, without providing further details.
Before departing Washington on Saturday, Liu He, Chinese vice premier and head of the Chinese delegation to the negotiations, told reporters that the two sides agreed to avoid a trade war.
"The biggest result from this round of China-US consultations is that both sides reached a consensus to not launch a trade war and stop imposing tariffs on each other," Liu said, according to the Xinhua News Agency.
The Xinhua report said the two countries would stop "slapping each other with tariffs." However, the joint statement did not mention if agreement had been reached on rolling back existing tariffs or when that might take effect.
The latest round of negotiations, following an initial round in Beijing earlier in the month, has been hailed by Chinese experts as a positive step toward addressing the trade conflict that has shaken financial markets and sparked concerns over damage to global trade.
Positive step
"This has been the most significant consultation between China and the US. We can see both sides putting the China-US trade relations back on the right path forward," Wei Jianguo, deputy director of the China Center for International Economic Exchanges and a former Chinese trade official, told the Global Times.
Wei said that one of the biggest achievements of the talks is that China has shown its willingness to address trade imbalances, while also being honest about what it can achieve within a certain time period and the US accepted it and has stopped "shouting and making unreasonable demands."
Ahead of the talks, US officials had reportedly demanded China reduce its trade deficit with the US by $200 billion by 2020. The joint statement on Saturday did not make any such reference.
"Asking China to reduce a trade deficit by $100 billion a year is just impossible. I think the US has realized that and returned to negotiations with a realistic attitude," Huo Jianguo, a senior research fellow at the Center for China and Globalization, told the Global Times. "Stopping the confrontational tone is the only correct way to address the conflict."
While the consensus to avoid a trade war is a key step, details of how to address the trade dispute still need more work, said Li Yong, a senior research fellow at the Ministry of Commerce's China Association of International Trade. "[The joint statement] just set the direction for further negotiations, and the details require more talks," Li told the Global Times.
The US will send a team to China to work out details about increasing US agriculture and energy exports to China, according to the joint statement. Both sides agreed on "meaningful increases" in such exports, the statement said.
"But one thing we have to make it clear is that any deal for China to substantially increase imports from the US has to be mutually-beneficial to both countries," Li said.
Apart from increasing US export to China, the joint statement also said that the two sides would strengthen intellectual property cooperation, encourage bilateral investment and create a fair, level playing field for competition.