China and the U.S. have reached an agreement on text of a phase one trade deal and will now move toward signing a deal as quickly as possible, Chinese officials said Friday.

Under the accord, the U.S. will scrap tariffs on Chinese goods in phases, a priority for Beijing, Vice Commerce Minister Wang Shouwen said. However, Wang did not detail when exactly the U.S. would roll back duties.

President Donald Trump later announced his administration would cancel its next round of tariffs on Chinese goods set to take effect Sunday. In tweets, he added that the White House would leave 25% tariffs on $250 billion in imports in place, while cutting existing duties on another $120 billion in products to 7.5%.

Beijing will increase agricultural purchases significantly, Vice Minister of Agriculture and Rural Affairs Han Jun said, though he did not specify by how much. Trump has insisted that Beijing buy more American crops as part of a deal, and cheered the provision in his tweets.

He added that the U.S. would begin negotiations on the next phase of the trade deal “immediately, rather than waiting until after the 2020 Election.” Trump had suggested he could wait until after November 2020 to strike an agreement, a comment that worried investors. 

Chinese Vice Premier and lead trade negotiator Liu He, right, reaches to shake hands with U.S. Trade Representative Robert Lighthizer before the opening session of trade negotiations at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019.

Mark Schiefelbein | Pool | Reuters

The developing deal involves intellectual property, technology transfers, agricultural goods, financial services and expansion of trade, Chinese officials said.

The agreement still needs to go through legal procedures as Washington and Beijing work toward setting a time for inking it.

Major U.S. stock indexes initially jumped following the comments from Chinese officials, but later gave up those gains.

The world’s two largest economies have scrambled to patch up a partial trade deal announced in October, which Trump said would involve more Chinese purchases of agricultural goods.

The president has used tariffs to pressure Beijing as he pushes for a broader agreement to address what he calls abuses including intellectual property theft, forced technology transfers and a massive trade deficit.

Reports emerged Thursday that the White House and China reached a phase one trade deal in principle, pending Trump’s approval. The president has not yet signed off on the agreement publicly.

— CNBC’s Evelyn Cheng and Yun Li contributed to this report

This story is developing. Please check back for updates.

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