China and the US have announced a preliminary trade agreement.

The so-called phase one deal will see billions of dollars in tariffs removed or delayed.

US stocks hit a fresh record on hopes there will be a continued softening of trade tensions between the world’s two largest economies.

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A fresh wave of US tariffs on Chinese imports was due to take effect on December 15. However, this has been canceled for now.

President Donald Trump tweeted: “We will begin negotiations on the phase two deal immediately, rather than waiting until after the 2020 Election.

“This is an amazing deal for all.”

If the new, higher tariffs had gone ahead, Chinese-made goods such as clothing, smartphones, and toys would have become more expensive for Americans just ahead of Christmas.

US negotiators are reportedly offering to significantly reduce existing tariffs on about $360 billion worth of Chinese imports.

In return, China has promised to buy large quantities of US soybeans, poultry and other agricultural products.

The agreement is a deal in principle, which means if China breaks any part of the agreement, the Trump administration has the ability to re-implement tariffs.