'Substantial progress' made in new round of China-US trade talks

Both China and the US have scheduled further tariff increases for December and Europe is considering retaliation against any US action

Both China and the US have scheduled further tariff increases for December and Europe is considering retaliation against any US action

The White House said the two sides made some progress on the thornier issues, including China's lax protection of foreign intellectual property.

The two countries are leaving the thornier issues - including USA allegations that China forces foreign countries to hand over trade secrets in return for access to the Chinese market - until later negotiations.

Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer hosted a Chinese delegation led by Vice Premier Liu He on Thursday and Friday in Washington.

US -based observers on Friday welcomed the progress made in the latest round of high-level economic and trade consultations between the United States and China. He reiterated his plans to meet with Liu at the White House on Friday, regarded as a good sign.

When asked about those tariffs, Trump said: "I think that we're going to have a deal that's a great deal that's beyond tariffs".

The U.S. president said he hopes that the two negotiation teams will keep up their efforts, finalize the text of the "phase one deal" at an early date, and move forward with future negotiations. The president did not mention any action regarding $160 billion in tariffs set to go into effect on December 15.

On the data front, USA import prices edged higher unexpectedly last month as energy costs bounced back.

United States chief negotiator Trade Representative Robert Lighthizer said a dispute settlement mechanism was being finalised. On Sept. 1, Washington hit Beijing with a 15% levy on $112 billion worth of goods, the first portion of the fourth tranche of tariffs set to be implemented by the U.S.

As a sign of goodwill, China has plans to increase its purchases of United States agricultural products, but the move falls far short of Trump's demands. Meanwhile, the Trump administration has continued to examine ways in which it could exert more pressure on Beijing beyond simply taxing Chinese imports. In a statement to FN, Footwear Distributors and Retailers of America president and CEO Matt Priest said, "In this ongoing, uncertain trade and business environment, any talk of a potential deal is a positive development".

"Both sides have been losing, and so has the global economy", said Myron Brilliant, head of worldwide affairs at the US Chamber of Commerce. The Chinese telecom giant is on a US blacklist restricting American companies from doing business with it out of concerns about national security.

Details are still emerging, but one person familiar with the agreement said it's likely to include some USA tariffs relief.

Though it lays the foundation for a broader accord later, "behind the hype, this is nothing more than partial and ostensibly unsustainable deal lacking in real enforcement mechanisms", he said in an analysis.

"It's critical to remember that all existing tariffs are expected to remain in place", said Alec Young, managing director of global markets research at FTSE Russell.

"For businesses this will mean less damage, not greater certainty", Daco said in a research note. Still, Beijing has been reluctant to make the kind of substantive policy reforms that would satisfy Washington. A private survey found last week that US factory output dropped in September to the lowest level since the recession year 2009.