Stocks surge on optimism about U.S.-China trade

US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer met with Chinese Vice Premier Liu He and other senior Chinese officials for about seven hours

Following a scheduled meeting with Chinese Vice Premier Liu He, Trump said today that the world's two largest economies have agreed to a "phase one" deal that includes China's purchase of $40 billion to $50 billion worth of American agricultural products as well as guidelines on intellectual property, reported The New York Times.

A "substantial" interim trade deal has been agreed to with China, averting a tariff increase that had been planned for October 15, and auguring an export windfall for U.S. farmers, President Trump said Friday.

President Trump says the US has reached a substantial phase one deal with China.

Leading up to the latest talks, the president had said he wanted to strike a comprehensive agreement which would include more Chinese enforcement of intellectual property rights, an end to the forced transfer of USA technology, greater access to Chinese markets and limits on subsidies of China's state owned businesses. In exchange, China agreed to boost purchases of US farm products.

Will take up to 5 weeks to get deal written.

In September, Trump delayed a tariff increase on $250 billion of Chinese goods to October 15 in a gesture of goodwill taking into account China's October 1 holiday.

"If this turns out to be all there is, we could have achieved these results a year ago or more", Derek Scissors, a trade expert at the American Enterprise Institute who has advised the Trump administration, told The Wall Street Journal. The Dow Jones Industrial Average jumped more than 400 points (1.6 percent) and the S&P 500 gained 1.7 percent in early trading.

However, he doubts that this will lead to a more comprehensive deal in the future, which will require Beijing to deliver broad structural reforms demanded by Washington.

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China ramped up purchases of USA pork ahead of the trade talks in Washington, with the us government reporting record-large weekly export sales Thursday.

But a White House spokesperson told CNBC the report was inaccurate, sending markets upwards again.

"Both sides have been losing, and so has the global economy", said Myron Brilliant, head of worldwide affairs at the US Chamber of Commerce.

Mr. Trump himself has expressed doubts that the two countries can strike a deal before the 2020 election, acting coy on Twitter Thursday ahead of the negotiations.

What the Democrats fear most is happening: President Trump and his negotiating team are reaching wide-ranging agreements with China that will be a huge boon to the United States. The US also imposed additional visa restrictions for Chinese government officials. China has hit back by targeting about $120bn in U.S. goods, focusing on farm products. The National Retail Federation welcomed Friday's progress but said "uncertainty continues" and they'd like to see all tariffs lifted.

In 2017, before the trade war started, China imported US$19.5 billion of United States farm output, falling to just over US$9 billion in 2018. "Warmer feelings than in recent past, more like the Old Days".

While describing the progress as "a good thing", Sourabh Gupta, a senior fellow at the Washington-based Institute for China-America Studies, struck a note of caution, citing the twists and turns of the protracted process.

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