China and the U.S. are zeroing in on an agreement that would mark a major milestone in their nearly two-year trade war, President Donald Trump claimed Thursday.
"Getting VERY close to a BIG DEAL with China. They want it, and so do we!" Trump said on Twitter.
The trade dispute between the world's top two economies has sent shockwaves through global markets amid fears that it could cause a global economic slowdown.
The Dow jumped more than 300 points in early morning trading on Trump's announcement, hitting all-time highs. Skepticism had been growing that Washington and Beijing would fail to hammer out what Trump has called a "phase one" agreement before year's end.
At issue for Washington is a lopsided trade balance with China -- the U.S. had a $378.6 billion trade deficit with China in 2018 -- as well as concerns over intellectual property theft, including what the Trump administration says is Beijing's policy of forcing American firms to transfer intellectual know-how to do business in China.
Trump has imposed wave after wave of U.S. tariffs on Chinese goods and China has responded in kind.
To date, the U.S. has imposed tariffs on $360 billion in Chinese imports, and the Wall Street Journal reported U.S. negotiators have offered to cut the penalties by 50%, but would reimpose them if China does not follow through on buying American goods and protecting U.S. intellectual property rights.
Negotiators are also offering to cancel additional duties on $160 billion of Chinese goods that are set to take effect Sunday, the Journal reported.
The trade war began in Jan. 22, 2018, two days after Trump assumed office, when he imposed tariffs on solar panels and washing machines coming from China.
China was affected again when Trump imposed additional import duties on aluminum imports coming into the U.S. from all countries, and the waves of economic penalties most seriously escalated when Trump slapped tariffs on $34 billion worth of Chinese goods.
Successive mutual retaliations have followed with each side raising the percentage of their tariffs and the dollar amount of goods on which they apply.
Trump announced in October that Washington and Beijing agreed to a "phase one" of a larger trade deal, but the time since has been spent on the two sides negotiating details of that agreement, which to date has remained elusive.