China and the United States have reached an agreement to “substantially” reduce Washington’s record bilateral trade deficit against Beijing, reported The Guardian. “To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States’ goods and services,” a joint US-China statement said on Saturday. The two sides agreed to an increase in US’ agriculture and energy exports.

This comes after two days of negotiations between teams led by Chinese Vice Premier Liu He and US Treasury Secretary Steven Mnuchin. “This is a positive, pragmatic, constructive and fruitful visit,” Liu was quoted by Xinhua as saying. “Both sides have reached a lot of consensus on the healthy development of Sino-US trade relations.” The US and China also pledged to improve cooperation on bilateral investment and intellectual property protection.

The $335 billion (approximately Rs 22.77 lakh crore) annual trade gap between the two countries has triggered fears of a global trade war. In April, Beijing imposed tariffs on 128 US products worth around $3 billion in response to Washington imposing duties on steel and aluminium imports from China as part of Donald Trump’s “America First” policy. China later announced an increase in tariff on $50 billion worth of American goods as the US announced to raise tariffs on Chinese goods.