WASHINGTON, DC, United States (AFP) — After nearly two years of conflict between the world’s top two economic powers, the United States and China signed a trade truce yesterday, causing businesses around the globe to breathe a sigh of relief.

The deal is a boon to US President Donald Trump, who faces an impeachment trial and a tough re-election fight later this year.

Trump called the agreement “momentous.”

But tariffs on hundreds of billions of dollars in goods remain in place – on two-thirds of the more than $500 billion in imports from China – leaving American consumers and businesses to foot the bill.

The “phase one” agreement includes pledges from China to beef up purchases of American crops and other exports for two years, provides some protections for US technology, and new enforcement mechanisms that allow Washington to quickly impose penalties, which Beijing cannot respond to.

“Today, we take a momentous step, one that has never been taken before with China,” that will ensure “fair and reciprocal trade”, Trump said at the White House signing ceremony.

“Together, we are righting the wrongs of the past.”

But as Trump ambled through a lengthy commentary on the deal, major networks switched away from the White House to Congress where articles of impeachment were to be presented to the Senate as the first step towards a trial.

The easing of US-China trade frictions has boosted stock markets worldwide in recent weeks, as it takes the threat of new tariffs off the table for now, and Wall Street hit new records after the signing.

Trump signed the deal with China’s Vice-Premier Liu He, who has led Beijing’s negotiations with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The US president thanked Chinese leader Xi Jinping and said he would visit China in “the not-too-distant future”.

“Negotiations were tough on us,” Trump said, but they led “to this really incredible breakthrough”.

But he said he will only remove the remaining tariffs “if we’re able to do phase two”.

“I’m leaving them on. Otherwise we have no cards to negotiate with.”

In a letter to Trump, read by Liu, the Chinese president said the deal is “good for China, for the US and for the whole world”.

However, the most difficult issues remain to be dealt with in “phase two” negotiations, including massive subsidies for State industry.

After announcing the deal on December 13, the United States cancelled a damaging round of new tariffs that were due to kick in two days later and also promised to slash in half the 15 per cent tariffs on $120 billion imposed September 1 on consumer goods like clothing.

That reduction will take effect in 30 days, when the deal enters into force, a senior administration official told reporters.