The United States and China agreed Wednesday to reduce tariffs on about 60% of the items Americans buy from China.
The deal, which President Donald Trump hailed as “historic,” came after months of trade negotiations and the largest bilateral trade pact in history.
The tariffs will be the biggest cut in the US-China trade deficit since 2001.
China has a $600 billion trade surplus with the United States, but the country is still struggling to make inroads in the auto sector after a steep downturn in China’s manufacturing.
China said the tariffs are aimed at preventing imports of steel, iron and aluminum, which account for a large share of American imports.
The agreement requires that all imports from China must be marked as such, and the United Kingdom and France have already banned them.
The agreement also includes a requirement for Chinese manufacturers to pay a 50% tariff on all foreign vehicles, up from the current 35%.
The agreement will apply to the U.S. market and the rest of the world.
“The U.s. will continue to protect its interests while China continues to protect those of the United Sates,” Commerce Secretary Wilbur Ross said in a statement.
The pact is expected to help the U,S.
economy grow by more than $3 trillion a year, as China expands its market and creates jobs, and is expected by some economists to spur growth in the United Nations and in the developing world.
China’s exports to the United State are expected to increase by about 30% this year and by another 20% in 2019, according to the International Monetary Fund.
and China are the only two nations in the world with bilateral trade in goods and services worth more than their economies.
China, however, has been the target of tariffs on everything from cars to machinery to cosmetics and electronics from the United states, which imposed a 45% tariff in 2014 and has since moved to a tariff of 70%.
Trump promised a big, new trade deal in his 2016 presidential campaign.
The first round of negotiations, known as the Trans-Pacific Partnership, took place over a year later in Atlanta.
The second round began in December, and on Wednesday, Trump announced that he was reopening the negotiations.
Trump also vowed to scrap the Obama-era Trans-Atlantic Trade and Investment Partnership and the Trans Pacific Partnership with China.
Those agreements were signed in 2010 and 2014, respectively.
China, meanwhile, has struggled to gain ground in the emerging markets it has struggled in, with its exports to Europe declining sharply.