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US and China agree to place trade war on hold and work toward new agreement: report

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US Treasury Secretary Steven Mnuchin announced Sunday that the U.S. and China have agreed to place the trade war on hold. (Getty Images)

The U.S.-China trade war is on hold as the world's two largest economies have agreed to stop their tariff threats and work on a trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday.

When did this happen?

Mnuchin and Larry Kudlow, President Donald Trump’s top economic adviser, said the tariff was placed on hold by Chinese and American negotiators on Saturday, Reuters news reported.

"We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework," Mnuchin said on "Fox News Sunday."

The two nations plan to continue talking about plans to allow China to “import more energy and agricultural commodities from the United States to close the $335 billion annual U.S. goods and services trade deficit with China,” the report stated.

During the first round of talks in Beijing this month, Washington demanded that China reduce its trade surplus by $200 billion, Reuters reported. No figure was cited for Saturday’s agreement.

Kudlow said on the news broadcast that it is “too soon" to lock in the $200 billion figure. "The details will be down the road. These things are not so precise," he said.

Beijing has agreed to substantially reduce the U.S. trade deficit with China. Measures are expected to include “structural reforms, such as lowering tariffs and non-tariff barriers, that will allow the United States to export goods worth billions of dollars more,” Kudlow said Sunday.

President Donald Trump is feeling positive about the latest development, but no trade deal has been reached, Kudlow said.

"There's no agreement for a deal," Kudlow told ABC. "We never anticipated one. There's a communique between the two great countries, that's all. And in that communique, you can see where we're going next."

What's next?

According to Mnuchin, the U.S. expects to see an increase of between 35 percent and 40 percent in agricultural exports to China this year, along with a doubling of energy purchases within three to five years.

"We have specific targets. I am not going to publicly disclose what they are. They go industry by industry," Mnuchin said in published reports.

China’s state-run news agency, Xinhua, said the US-Chinese statement amounted to a vow “not to launch a trade war against each other."

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