The U.S. and China have finally reached an agreement on trade, defusing rising trade war tensions, White House officials announced Saturday.

Following two days of bilateral consultations on trade, representatives from Washington and Beijing reached a consensus on trade, with the latter agreeing to take “effective measures to substantially reduce the United States trade deficit in goods with China,” a joint statement explained.

An increase in exports to China would “meet the growing consumption needs of the Chinese people and the need for high-quality economic development,” as well as “help support growth and employment in the United States,” according to the statement.

In particular, China intends to import more agricultural and energy products from the U.S. The representative from Beijing agreed to work with the U.S. government to ensure the protection of intellectual property rights.

“Both sides agreed to encourage two-way investment and to strive to create a fair, level playing field for competition,” according to the joint statement.

The U.S. had initially demanded a trade deficit reduction of $200 billion, a figure China reportedly rejected. It is unclear at this time by how much China is offering to reduce the U.S. trade deficit with China. Nonetheless, the agreement should help to reduce tensions. The U.S. trade deficit with China in 2017 was $375.2 billion.

The Trump administration decided to impose hard-hitting tariffs on foreign-made steel and aluminum in March, prompting China to impose roughly $3 billion in tariffs on American products. That same month, the administration also announced plans to impose about $50 billion in punitive tariffs on Chinese products for Chinese theft of American intellectual property. China threatened to retaliate with tariffs of equal weight, leading President Donald Trump to threaten China with $100 billion in additional tariffs.

China responded with similar threats, vowing to fight until the end. (RELATED: China Says It Will ‘Counterattack With Great Strength’ If Trump Hits Them With More Tariffs)

Despite the exchange of heated rhetoric, both sides continued to push for a negotiated solution behind the scenes. Trade talks in Beijing earlier in May failed to produce results, but it appears that talks in Washington have produced at least a tentative solution, a ceasefire in the trade war.

“Both sides agreed to continue to engage at high levels on these issues and to seek to resolve their economic and trade concerns in a proactive manner,” Saturday’s statement read.

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