Donald Trump said the two sides agreed on "a very substantial phase one deal."

US President Donald Trump on Friday hailed a breakthrough in his drawn-out trade war with China, saying the two sides reached an initial deal covering intellectual property, financial services and currencies.

With the agreement the White House will hold off on a massive tariff increase planned for next week, US Treasury Secretary Steven Mnuchin told reporters.

However, details of the deal were scant.

Trump said the two sides agreed on "a very substantial phase one deal," and although the agreement had yet to be written he hoped to sign it with Chinese President Xi Jinping in the coming weeks.

An interim bargain could allow both economic powers to claim success, while averting damaging escalation in the trade war and leaving the thorniest issues for later.

After more than a year of trench warfare, however, it remained unclear whether the countries could sustain the momentum needed to conclude subsequent "phases" of the deal.

China so far has balked at Trump's demands for profound changes in the management of its economy, which analysts say could politically undermine the Communist Party.

Wall Street stocks gave up some gains from earlier in the day, with investors a little deflated the deal did not offer more.