President Donald Trump and Chinese President Xi Jinping agreed to hold off on upping tariffs for at least three months, potentially cooling the trade war between the two largest world economies.
The truce was confirmed by the White House after media earlier quoted Chinese state-run TV as saying the tariffs would be halted temporarily.
Trump agreed to leave the tariffs of some $200 billion worth of Chinese imports at 10% and not increase them has expected next month, said a White House statement.
China would agree to purchase a "not yet agreed upon, but very substantial," amount of agricultural, energy, industrial, and other products from the U.S., according to the statement.
Beijing will also buy agricultural products "from our farmers immediately," read the statement.
The two leaders also agreed to "immediately begin negotiations" on technology transfer, protecting intellectual property, non-tariff barriers, "cyber intrusions" and cyber theft, services and agriculture, according to the statement.
Trump and Xi expect to conclude their work on a deal within 90 days, but if they can't agree, tariffs would increase to 25%. In addition, Xi is "open to approving" a deal with Qualcomm (QCOM - Get Report) and NXP Semiconductors (NXPI - Get Report) in the future, would introduce criminal punishments for selling Fentanyl to the U.S., and continue negotiations around North Korea, said the statement.
Hours earlier, Reuters had quoted Chinese state-run television as reporting that "no additional tariffs will be imposed after January 1, and negotiations between the two sides will continue."
Trump and Xi met for a highly anticipated dinner after the G20 summit in Argentina over the weekend. Earlier Saturday, Trump said he would hold off on giving any press conferences until after the funeral of former President George H. W. Bush who died late Friday night.
The administration had been threatening to up tariffs on hundreds of billions of dollars worth of Chinese imports to 25% from the 10% announced in September.
The tariffs are justified as the "United States' continuing response to China's theft of American intellectual property and forced transfer of American technology," according to the Office of the United States Trade Representative, which in September listed the 6,000 or so Chinese goods that would be subject to additional tariffs.
The high rate was to be imposed in January, after U.S. retailers will have ended their holiday shopping season that's so critical to their total annual sales.
But many are fearful that increased tariffs and a trade war between the two rich nations could increase prices and ultimately hurt their economies.