China and the United States have agreed to roll back tariffs on each others' goods as part of the first phase of a trade deal, officials from both sides said on Thursday, offering a new sign of progress despite ongoing divisions about the months-long dispute.
The Chinese commerce ministry, without laying out a timetable, said the two countries had agreed to cancel the tariffs in phases.
A US official, speaking on condition of anonymity, confirmed the planned rollback as part of a "phase one" trade agreement that President Donald Trump and President Xi Jinping are aiming to sign before the end of the year.
Trump has used tariffs on billions of dollars of Chinese goods as his primary weapon in the trade war between the world's two largest economies.
The prospect of lifting them, even in phases, has drawn fierce opposition from many of his advisers in and outside of the White House. US stocks pared gains after Reuters reported that the plan faced internal opposition.
"There is no specific agreement for a phased rollback of the tariffs," said Michael Pillsbury, an outside adviser to Trump. "The American side has been ambiguous when and which tariffs will be lifted. The Chinese have some wishful thinking and are trying to soothe their domestic hardliners that the tariffs will someday come off."
Trump last month outlined the first phase of a deal to end the trade war with China and suspended a threatened tariff hike, but officials on both sides said then that much work needed to be done before the pact would be finalised.
If it is completed, it is widely expected to include a US pledge to scrap tariffs scheduled for December 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys.
Tariff cancellation was an important condition for any agreement, Chinese Commerce Ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other's goods to reach the phase one pact.
"The trade war started with tariffs, and should end with the cancellation of tariffs," Gao told a regular news briefing.
The proportion of tariffs cancelled for both sides to reach a "phase one" deal must be the same, but the number to be cancelled can be negotiated, he added, without elaborating.
"In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately," Gao said.
"Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations."
A spokesman for the US Treasury department declined to comment and the US Trade Representative's office did not immediately respond to a request for comment.
Republican lawmakers are urging the Trump administration to tie any tariff rollbacks to Beijing's compliance with specific elements of the agreement. "The tariffs should be phased out piece by piece as China complies," one congressional source said.
In what could be another gesture to boost optimism, China's state news agency Xinhua reported late on Thursday that the Chinese customs and Ministry of Agriculture are considering removing restrictions on US poultry imports, according to Reuters news agency.
China has banned all US poultry and eggs since January 2015 due to an avian influenza outbreak.
Beijing's signal that a "phase 1" trade deal with the United States was close to being sealed helped Europe's share markets hit a more than 4-year peak on Thursday and bond yields shuffled higher.
A source previously told Reuters that Chinese negotiators wanted the United States to drop 15 per cent tariffs on about $125 billion worth of Chinese goods that took effect on September 1.
They also sought relief from earlier 25 per cent tariffs on about $250 billion of imports, ranging from machinery and semiconductors to furniture.
A person familiar with China's negotiating position said it was pressing Washington to "remove all tariffs as soon as possible".
A deal may be signed this month by Trump and Xi at a yet-to-be determined location.
Dozens of venues have been suggested for a meeting, which had originally been set to take place on the sidelines of a now-cancelled mid-November summit of Asia-Pacific leaders in Chile, a senior Trump administration official told Reuters on Wednesday.
One possible location was London, where the leaders could meet after a NATO summit that Trump is due to attend from December 3-4, the official said.
Gao declined to say when and where such a meeting could be.
Since Trump took office in 2017, his administration has been pressing China to curb massive subsidies to state-owned firms and end the forced transfer of American technology to Chinese firms as a price of doing business in China.