The US and China have reached a "substantial" phase one trade agreement, according to US president Donald Trump.

The agreement covers intellectual property, financial services and large agricultural purchases, Mr Trump told reporters after talks with China’s vice premier Liu He.

He said: It took us a long time to get here, but it’s something that’s going to be great for China and great for the USA.

He offered few specifics but it was reported that the US will suspend a tariff hike on $250bn (£197bn) in Chinese imports that was set for Tuesday.

In exchange, China will buy between $40bn (£31bn) and $50bn (£39bn) in US farm products and be more open about how the value of its currency is set.

The US has previously claimed China manipulates the yuan’s value to give its exporters an advantage.

Treasury Secretary Steven Mnuchin said China had also agreed to open its markets to US financial service providers.

No documents have been signed, but Mr Trump was confident, saying: China wants it badly, and we want it also.

We should be able to get that (the agreement on paper) done over the next four weeks.

He later added: There was a lot of friction between the United States and China, and now it’s a lovefest – that’s a good thing.

There has been no update regarding moves planned for December which would see tariffs extended to almost everything China exports to the US, including clothes, toys and mobile phones.

Mr Liu said: We have made substantial progress in many fields.

We are happy about it. We’ll continue to make efforts.

Markets in the US were encouraged by the news, which increased hopes that the 15-month trade war between the world’s two largest economies could be nearing an end.

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all added just over 1% in Friday trading.

The gains were not as great as had been seen earlier in the day, however, as markets had anticipated a more wide-ranging agreement.

Commentators were cautious, with Craig Allen, president of the US-China Business Council, saying: We await word on how implementation will be measured and in what timeframe, as well as details on scheduling subsequent phases.

Derek Scissors, a China expert at the American Enterprise Institute, added: The president is acting as if a lot of Chinese concessions have been nailed down, and they just haven’t.

Myron Brilliant, executive vice president of the US Chamber of Commerce, described the agreement as a ray of hope for the relationship between the two countries.

Gregory Daco, an economist at Oxford Economics, said the agreement would mean less damage, not greater certainty for US businesses, adding: Beyond the promises and niceties, the deal doesn’t address key underlying issues.

(c) Sky News 2019: ‘It’s a lovefest’: Trump celebrates phase one trade agreement with China