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(CNN) - President Donald Trump signed an initial trade agreement with China that would avoid the impending US tariffs. and it would reduce the rates of existing tariffs in exchange for a Chinese promise to buy US agricultural products, US officials and others familiar with the deal said.
Trump's sales team informed the president about the deal during a mid-afternoon meeting at the White House on Thursday.
Trump had already announced the broad contours of the “phase one” agreement in October, and the two sides have been haggling over specific details since then. The "phase one" agreement does not address the main structural changes in China's economy that Trump has sought.
The terms of the agreement include a delay in the new tariffs of US $ 160,000 million in Chinese-made electronic products and toys scheduled to take effect on December 15, as well as a halving of some existing US tariffs, one person said. familiar with the agreement.
READ: iPhones, switches and toys are on the table of trade negotiations between the US and China
In return, China has promised to buy American agricultural products. China has made similar promises in past negotiations, but for the most part it has not been able to fulfill large purchases.
Progress with China comes days after Trump reached an agreement with Congressional Democrats on his revised trade pact with Mexico and Canada, fulfilling two major priorities in which he campaigned in 2016.
The advance with Beijing comes weeks after intense negotiations between the two economic superpowers in the world resumed in October.
Trade uncertainty has weighed heavily on the economy, a centerpiece of the president's re-election campaign. On Wednesday, Federal Reserve President Jerome Powell avoided commenting directly on any specific trade agreement with China or Mexico and Canada, but acknowledged that such progress "would eliminate uncertainty and be positive" for the US economy.
"Delaying the imposition of tariffs in February or beyond would allow the president to weather the process of political trial in the Senate and also have a victory with the approval of the USMCA (T-MEC) by the Senate," said James Lucier, managing director from Capital Alpha Partners. "Both developments would put the president in a stronger position for future business talks."
Early in the day, Trump hinted that progress was being made between the two sides, tweeting: “Approaching VERY A GREAT AGREEMENT with China. They want it and so do we! ”
The optimistic tone contrasted with that of more than a week ago, when the president suggested that he liked the idea of waiting until after the 2020 elections.
"I have no deadline," Trump told reporters in London.
Close commercial observers from the United States and China have seen such comments from the president as an effort to maximize pressure on Chinese leader Xi Jinping to win as many concessions as possible. US negotiators have also been pressuring China to commit to agricultural purchases, a request that Beijing has been reluctant to accept year-round.
"The trade team on both sides maintains close communication," Gao Feng, a spokesman for China's Ministry of Commerce, said at a press conference on Thursday, without providing details.
But in recent days, there has been greater optimism that the two sides could reach an initial phase one agreement as negotiators are moving quickly to review the text of an agreement.
"What people expect is for a phase one agreement to be made and for tariffs not to increase," Jamie Dimon, CEO of JPMorgan Chase and head of the Business Roundtable said Wednesday. "If those things do not happen, it will be negative for the market and a small negative for world GDP."
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