The world's two largest economies appear to have averted a potentially damaging trade war with a consensus to substantially reduce the United States trade deficit with China that has been hailed as a win-win by Chinese media, but viewed with scepticism in the US.
Chinese Vice-Premier Liu He, who led his team in the trade talks in Washington with US Treasury Secretary Steven Mnuchin and his team, told the media on Saturday that the two sides had agreed not to launch a trade war.
He added that the two sides also agreed to stop imposing tariffs on each other, according to Chinese state news agency Xinhua.
US Treasury Secretary Steven Mnuchin on Sunday (May 20) also confirmed that the two sides were "putting the trade war on hold", and that they had agreed to set up a framework for addressing trade imbalances in the future.
"Right now, we have agreed to put the tariffs on hold while we try to execute the framework," Mr Mnuchin said in a television interview.
On Saturday, a joint statement by China and the US, released by the White House, said: "There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China."
It added that China would "significantly increase" purchases of US goods and services, and that this would "help support growth and employment in the United States".
Both sides agreed on meaningful increases in US agriculture and energy exports, the statement said. It added that the US would send a team to China to work out the details.
US President Donald Trump's administration had threatened to impose heavy tariffs on up to US$150 billion (S$201 billion) worth of imports from China, with the Chinese then threatening to reciprocate. The tariffs were slated to go into effect early next month.
The two sides later began talks aimed at averting a potentially globally damaging trade war.
Chinese media has reported on Saturday's consensus favourably, with Xinhua on Sunday calling it a "win-win" that would help the US reduce its trade deficit and grow its economy, and the Chinese to diversify and optimise their supply of goods.
Chinese economist Hu Xingdou said that the consensus could prevent the escalation of trade tensions into a trade war, or even spreading to other areas such as the military.
However, he added that it is just a framework for talks, with negotiation in specific areas going to be an "arduous task". He expects that it could take one or two years to resolve all the trade issues.
In Washington, the view was that the two sides failed to make a quick deal but made general promises and left the details for later.
Mr Larry Kudlow, director of the National Economic Council, told reporters that China offered to narrow the trade gap by US$200 billion. "They are meeting many of our demands," he said. But he added: "There is no deal yet, to be sure."
Dr Patrick Cronin, senior director for the Asia-Pacific programme at the Centre for a New American Security, said the joint statement was "harmonious... but far from clear whether this will address core concerns that prompted the threat of a trade war to begin with".