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WASHINGTON – President Donald Trump is rolling back tariffs on $360 billion in Chinese imports and canceling/delaying levies scheduled to take effect this month on another $160 billion worth of goods in a sign of easing trade tensions between the world’s two largest economies.

The decision, which Trump announced last week after a White House meeting with his advisers, comes amid what the president described as encouraging signs in ongoing trade negotiations with China.

Just days before the announcement, Trump suggested that a trade deal might have to wait until after the 2020 election as the talks stalled in part over the question of China’s purchase of soybeans, poultry and other products from U.S. farmers.

But the decision to roll back the existing tariffs and cancel/delay new levies set to take effect last weekend buys the two sides additional time to finalize a limited trade deal.

Trump has slapped tariffs on $360 billion in Chinese products since trade tensions between the two countries escalated nearly two years ago.

Under the agreement, the Trump administration also agreed to reduce its existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%.

In return, U.S. Trade Representative Robert Lighthizer told reporters, China agreed to buy $40 billion a year in U.S. farm products over two years, even though U.S. agricultural exports to China have never topped $26 billion a year. In addition, Beijing committed to ending a long-standing practice of pressuring companies to hand over their technology as a condition of gaining access to the Chinese market.

Lighthizer said China also agreed to lift certain barriers to its market for such products as beef, poultry, seafood, pet food and animal feed.

In all, the U.S. expects a $200 billion boost in exports over two years as a result of the deal.

"We expect the trade deficit to go down for sure," Lighthizer said, adding that the agreement will likely be signed the first week in January and take effect 30 days later.

``Everything is written," he said. “Everything is completely finished.”

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While the deal has not yet been signed by the officials in either country, but the verbal agreement represents and important step forward in negotiations, said Laurie Fischer, CEO of the American Dairy Coalition. 

“Farmers have waited a very long time for a trade settlement with China and are optimistic the $50 billion annual increase in purchases by China will provide a much needed boost to their financial well being," said Laurie Fischer, CEO of the American Dairy Coalition.

American Farm Bureau Federation President Zippy Duvall said U.S. farmers are eager to get back to business globally.

"Progress restoring our ability to be competitive in China is a key component of that and this development is welcome news," Duvall said. "China went from the second-largest market for U.S. agricultural products to the fifth-largest since the trade war began. Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet."

Duvall said American farmers would much rather farm for the marketplace and not have to rely on government trade aid.

"We are eager to learn the details of China’s commitment to purchase more agricultural products," he said. "American agriculture has been caught in the trade war crosshairs and it’s time to turn the page."

For more than a year, the U.S. and China have been waging a bitter tit-for-tat trade battle amid accusations that Beijing steals technology from U.S. companies and pressures them to hand over trade secrets in order to do business in China.

When Trump slapped tariffs on Chinese products, Beijing hit back with retaliatory levies on more than $110 billion worth of U.S. goods, including agriculture products, cars, auto parts, chemicals, whiskey, cigars, clothing and TVs.

After months of negotiations, Trump announced in October that his administration had reached a preliminary “Phase One” trade deal with China that called for the Chinese to buy billions of dollars in goods from U.S. farmers, take steps to protect American intellectual property and enact new guidelines for how China manages its currency.

But the preliminary deal was really just a framework, with most of the details still to be worked out. U.S. and Chinese negotiators have been in talks for weeks to finalize the limited agreement but have been haggling over exactly how much agriculture goods Chinese would buy from American farmers.

Mary Lovely, a trade economist at the Peterson Institute for International Economics, said it''s unlikely that Friday's deal delivers enough benefits for the U.S. to outweigh the costs of the trade fight so far.

U.S. farmers lost billions of dollars in income, companies paid billions in tariffs and in many cases shifted their supply chains, and consumers saw some prices increase.

"Many of us are highly skeptical that the agreement will be enough to outweigh these other costs," Lovely said. "The U.S. didn't move the needle very much."

Still, the agreement should help smooth some of the uncertainty surrounding global trade, Lovely said.

"We have a cease-fire, we have some roll back, that is very significant," she said. “We were kind of on a brink here, and we saw the negotiators pull us back.”

The Associated Press and Colleen Kottke of the Wisconsin State Farmer contributed to this report.

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