JUST IN: US,China Agree Trade War Cease Fire

President Donald Trump and China’s Xi Jinping agreed to a cease-fire Saturday in their nations’ yearlong trade war, averting for now an escalation feared by financial markets, businesses and farmers.

Trump said U.S. tariffs will remain in place against Chinese imports while negotiations continue. Additional trade penalties he has threatened against billions worth of other Chinese goods will not take effect for the “time being,” he said, and the economic powers will restart stalled talks that have already gone 11 rounds.

“We’re going to work with China where we left off,” Trump said after a lengthy meeting with Xi while the leaders attended the Group of 20 summit in Osaka.

While Trump said relations with China were “right back on track,” doubts persist about the two nations’ willingness to compromise on a long-term solution. Among the sticking points: The U.S. contends that Beijing steals technology and coerces foreign companies into handing over trade secrets; China denies it engages in such practices.

The United States has imposed 25% import taxes on $250 billion in Chinese products and is threatening to target an additional $300 billion, extending the tariffs to virtually everything China ships to America.

China has countered with tariffs on $110 billion in American goods, focusing on agricultural products in a direct and painful shot at Trump supporters in the U.S. farm belt.

Some progress seemed to be made in a dispute involving the Chinese telecommunications company Huawei, which the Trump administration has branded a national security threat and barred it from buying American technology. Trump said Saturday he would allow U.S. companies to sell their products to Huawei, but he was not yet willing to remove the company from a trade blacklist.

The U.S. has tried to rally other nations to block Huawei from their upcoming 5G systems.

The Trump-Xi meeting between the two leaders was the centerpiece of four days of diplomacy in Asia for Trump, whose re-election chances have been put at risk by the trade dispute that has hurt American farmers and battered global markets. Tensions rose after negotiations collapsed last month.

The apparent truce continues a pattern for Trump and Xi, who have professed their friendship and paused protectionist measures, only to see negotiations later break down.