US and China agree to trade truce ahead of G20 meeting, says report

The United States and China have agreed to a trade truce ahead of a meeting between the leaders of the two nations at the G20 summit in Osaka this weekend, according to a joint report from Politico and the South China Morning Post on Thursday.

The truce will halt previously threatened US tariffs on an additional $300bn of Chinese exports, which were tabled after trade talks collapsed in May, with the agreement and greater details set to be announced through coordinated press releases from Washington and Beijing.

It is understood that Chinese President Xi Jinping's had made Saturday's scheduled meeting with Donald Trump conditional on those levies being frozen.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are also due to meet with Chinese Vice Premier Liu He, with more figures having been added to both delegations during the past week.

Washington has previously threatened to impose duties of up to 25% on the remaining untaxed Chinese exports if this weekend’s talks go badly, though Trump appeared to dial this threat back to 10% on Wednesday.

But the US President told the Fox Business Network that securing a deal was "absolutely possible", bolstering investor confidence that saw markets in China, Hong Kong, India and Japan rally overnight.

Russ Mould, investment director at AJ Bell, said: "This weekend is extremely important for the future direction of global stock markets. The G20 summit will include trade talks between the US and China and investors will be looking for any sign that the two countries can sort out their differences."

The tit-for-tat trade war between the two superpowers has lasted for more than a year and seen both sides impose tariffs on hundreds of billions of dollars of each other's goods, wreaking havoc on global markets.