China agrees to 'reduce and remove' tariffs on United States cars

This amounts to a tactical pause, giving both sides time to work out the details, both of how China will in the short-term live up its promise to buy USA goods and, more seriously, how the two sides will resolve the fundamental philosophical differences that continue to divide them on trade.

China hopes the final agreement will lead to cancelling of all tariffs, the chance of which has increased now post the Xi-Trump meeting.

He also hailed improved relations in a tweet, saying: "My meeting in Argentina with President Xi of China was an extraordinary one".

The U.S. -China Economic and Security Review Commission, said in its report that Beijing has been slow to add new categories to the list of prohibited substances.

USA markets soared on news of the detente with the Dow rising more than 400 points in Monday morning trading. Asian markets were sharply higher.

Presidents Donald Trump and Xi Jinping have agreed to a ceasefire in their increasingly painful trade war, yet their governments' differing depictions of the deal show just how far apart they really are. Trump said, however, "We are dealing from great strength, but China likewise has much to gain if and when a deal is completed". But the magnitude and timing of such a reduction were unclear, the person said.

Financials were the biggest boost to European shares as China-exposed bank HSBC rose and lenders across the region cheered the prospect of a détente in a trade war, which has dented world economic growth prospects.

Increases in tariffs have large negative effects while resolution does not undo the harm completely, as economies have difficulty bouncing back from the structural changes induced by the tariffs.

There was also caution from the US business community.

Tesla didn't respond to an email seeking comment while BMW declined to comment.

Exporters of fentanyl have skirted Chinese laws by shifting to analogues, or molecules that have similar effects on the body, but don't fall under bans the country has imposed on fentanyl itself, according to a report from the commission released on November 26.

Analysts cautioned on Monday that the trade deal may have only bought some time for more wrangling over deeply divisive trade and policy differences, and said China's economy would continue to cool regardless under the weight of weakening domestic demand.

China had previously offered to increase its purchases of U.S. products, only to have Mr Trump reject the deal.

In Asia, the Shanghai composite closed 66.61 points up, a rise of 2.57 percent, while the Shenzhen composite advanced 3.34 percent to finish the trading day up 256.72 points. A Heritage Foundation analysis of data put soybeans as the most important crop, being 63% of agricultural exports to China. A total of $US360 billion worth of goods flowing between the two countries are subject to new tariffs imposed this year: $US250 billion worth of Chinese goods coming into the United States and $US110 billion worth of U.S. goods going to China. U.S. Trade Representative Robert Lighthizer said Wednesday that Washington would consider taking a countermeasure of raising the rate on cars from China from the current 27.5 percent to 40 percent. On Sunday, Trump tweeted that China had agreed to cut import levies on American-made cars.

China was already hit with $50 billion worth of tariffs earlier this year.

Tensions rose in May when the USA administration said it would levy extra taxes on $50 billion worth of Chinese goods, bringing that figure up to $250 billion over the next few months.