<![CDATA[Donald Trump tweets that a US-China trade deal is 'very close', buoying stock market]>

Washington and Beijing are "very close" to reaching a deal that would halt the 17-month-old tariff battle between the world's two biggest economies, US President Donald Trump said in a Twitter post on Thursday.

"Getting VERY close to a BIG DEAL with China," Trump said in his tweet. "They want it, and so do we!" he added.

He did not elaborate. The promise of at least a ceasefire in the prolonged trade war delighted the investment community, as stocks surged soon after the tweet, with the S&P 500 hitting a record high.

Trump's comments come amid a flurry of reports that a tariff hike slated to go into effect on Sunday will not go ahead.

The Wall Street Journal, citing sources familiar with the negotiations, reported that the US side has offered to cut existing punitive tariffs on Chinese goods by as much as half in addition to cancelling the new round of levies.

The latest duties would be 15 per cent on a further US$156 billion of Chinese imports. Washington has already placed punitive tariffs of 15 to 25 per cent on about US$360 billion of Chinese goods since the trade war started in July 2018.

The US and China have been working out the details of a "phase-one" deal that could halt the bruising trade dispute.

Top White House economic adviser Larry Kudlow said earlier this month that Trump liked where the trade talks were going, and that a deal was "close".

Top White House economic adviser Larry Kudlow said earlier this month that Trump liked where the trade talks were going, and that a deal was "close". Photo: Reuters alt=Top White House economic adviser Larry Kudlow said earlier this month that Trump liked where the trade talks were going, and that a deal was "close". Photo: Reuters

Washington and Beijing had been expected to meet after the Asia-Pacific Economic Cooperation summit in Santiago last month to sign the interim trade agreement, which would see China buy more US agricultural goods and increase intellectual property protections.

But the plan to complete the deal fell through after the Apec meeting was cancelled and tensions between the two countries rose over the Hong Kong protests and China's treatment of its Muslim ethnic Uygur people in Xinjiang region.

Earlier this month, Trump suggested he could wait until after the 2020 election to strike a trade agreement with China and that he was under "no deadline" to complete a deal.

This article originally appeared on the South China Morning Post (SCMP).

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