The Trump administration has reached a phase one trade deal with China in principle, pending approval from President Donald Trump, three sources told the media on Thursday.
Stock futures jumped on the news but the gains were capped as traders awaited confirmation of the deal from China.
Trump met with top advisors on Thursday about trade with China and whether to delay the next round of U.S. tariffs. Duties of 15%, set to take effect Sunday, would affect about $160 billion in Chinese-made goods including toys, computers, phones, and clothing.
Sources have been quoted as saying the White House has offered to scrap those duties and slash some existing tariffs in half. The U.S. proposed cutting existing duties on $360 billion in Chinese products by 50%.
Trump has focused on the U.S. agricultural products China will purchase as part of the deal, according to at least one of the sources. China had committed to buying about $40 billion in goods, while the president wanted the figure closer to $50 billion.
Trump wants a broad trade agreement with China to address concerns about intellectual property theft, forced technology transfers and trade deficits. The president, who promised to crack down with China during his 2016 campaign, views an agreement as an economic and political priority ahead of his 2020 reelection bid.
