US Treasury Secretary Steven Mnuchin said a ”trade war” with China has been put on hold after the economic powerhouses reached a tentative agreement on cutting deficits between the two countries.

“We have made very meaningful progress, and we agreed on a framework,” Mnuchin told Fox News Sunday following weekend talks in Washington with Chinese officials about cutting the US trade deficit with the world’s second-biggest economy. “We’re putting the trade war on hold.”

President Donald Trump set off the trade spat in March by imposing tariffs on imports of steel and aluminium, including those from China, but later exempted European countries. Trump’s move sparked a string of tit-for-tat retaliatory measures by both countries, with food products not escaping punishment.

Now in the latest development, Mnuchin said the tariffs will be put on hold while the countries try to execute a framework agreement on cutting their respective trade deficits.  

The progress in talks sparked a rally in Asian and European stocks on Monday before the US open, with the UK’s FTSE-100 headed for a record high.

Meanwhile, Fox News Sunday reported the tentative agreement includes China buying “substantially” more US goods to cut the deficit, structural changes to the Chinese economy to help make the US more competitive in that market and ”protections on technology, which have been very important to the president”. 

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