The world’s two largest economies have made progress in their trade dispute before without sealing a deal. In May US officials accused China of walking away from a sweeping agreement that was nearly finished over a refusal to make changes to Chinese laws that would have ensured its enforceability.
Trump had said previously he would not be satisfied with a partial deal to resolve his effort to change China’s trade, intellectual property and industrial policy practices, which he argues cost millions of US jobs. On Friday he said he had decided that a phased approach was appropriate.
US stocks ended more than 1% higher on Friday but well off the day's highs after the announcement, with the S&P 500 up 1.09% after rising as much as 1.7% earlier on hopes of an agreement.
Trump and Chinese President Xi Jinping are both scheduled to attend a Nov. 16 summit of the Asia Pacific Economic Cooperation countries in Santiago, Chile, and Trump hinted that a written agreement could be signed there.
There have been positive signs from China in recent days.
China’s securities regulator on Friday unveiled a firm timetable for scrapping foreign ownership limits in futures, securities and mutual fund companies for the first time. Increasing foreign access to the sector is among the US demands at the trade talks.
Beijing previously said it would further open up its financial sector on its own terms and at its own pace.
On Thursday, the US Department of Agriculture confirmed net sales of 142,172 tonnes of US pork to China in the week ended Oct. 3, the largest weekly sale to the world’s top pork market on record.
The president said China had agreed to make purchases of $40 billion to $50 billion in US agricultural goods. Mnuchin said the purchases would be scaled up to that amount annually.
A person briefed on the talks said that the proposed intellectual property provisions were largely centred on strengthening “20th century” IP protections such as those involving copyrights, trademarks and piracy. Not addressed were more difficult technology transfer issues involving data flows, cybersecurity, product standards reviews and a new social credit system that evaluates company behaviour.
The status of China’s Huawei Technologies Co Ltd, the world’s biggest telecoms gear maker, which has been put on a US trade blacklist since May, was not part of the deal, Lighthizer said.
Trump said some IP issues would be left for later phases of the talks. He said talks over a second phase would begin as soon as the first phase agreement was signed and said a third phase might be necessary, too.
Liang Haiming, Hong Kong-based chairman of think-tank China Silk Road iValley Research Institute, called the agreement “anesthetic, pain relief, not an antidote.”