WASHINGTON (AFP) -- After nearly two years of conflict between the world's top two economic powers, the United States and China signed a trade truce on Wednesday, letting businesses around the globe breathe a sigh of relief.

The deal is a boon to US President Donald Trump, who faces an impeachment trial and a tough reelection fight later this year.

Trump called the agreement "momentous."

But tariffs on hundreds of billions of dollars in goods remain in place -- on two-thirds of the over $500 billion in imports from China -- leaving American consumers and businesses to foot the bill.

The "phase one" agreement includes pledges from China to beef up purchases of American crops and other exports for two years, provides some protections for US technology, and new enforcement mechanisms that allow Washington to quickly impose penalties, which Beijing cannot respond to.

"Today, we take a momentous step, one that has never been taken before with China," that will ensure "fair and reciprocal trade," Trump said at the White House signing ceremony.

"Together, we are righting the wrongs of the past."

But as Trump ambled through a lengthy commentary on the deal, major networks switched away from the White House to Congress where articles of impeachment were to be presented to the Senate as the first step towards a trial.

The easing of US-China trade frictions has boosted stock markets worldwide in recent weeks, as it takes the threat of new tariffs off the table for now, and Wall Street hit new records after the signing.

Trump signed the deal with China's Vice Premier Liu He, who has led Beijing's negotiations with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The US president thanked Chinese leader Xi Jinping and said he would visit China in "the not-too-distant future."

"Negotiations were tough on us," Trump said, but they led "to this really incredible breakthrough."

But he said he will only remove the remaining tariffs "if we're able to do phase two."

"I'm leaving them on. Otherwise we have no cards to negotiate with."

In a letter to Trump read by Liu, the Chinese president said the deal is "good for China, for the US and for the whole world."

However, the most difficult issues remain to be dealt with in "phase two" negotiations, including massive subsidies for state industry.

Whither tariffs?

And elements of the deal the administration has touted as achievements effectively take the relationship between the two powers back to where it was before Trump took office.

"A huge amount of this is a reset," said Chad Bown, a trade expert with the Peterson Institute for International Economics.

"A lot of these elements are locking in things that were already there, or already in train before."

And the absence of any provision on China's industrial subsidies leaves "a big giant gaping hole that has not been addressed," Bown told reporters.

After announcing the deal on December 13, the United States canceled a damaging round of new tariffs that were due to kick in two days later and also promised to slash in half the 15 percent tariffs on $120 billion imposed September 1 on consumer goods like clothing.

That reduction will take effect in 30 days, when the deal enters into force, a senior administration official told reporters.

But Bown noted that the average US tariff on China over the course of trade war has surged from three percent at the beginning of 2018 to over 19 percent, even after the phase one deal.

What's in a deal?

The official said China has not made any specific commitments to cut tariffs it has imposed on US goods in retaliation.

But Beijing agreed to import an additional $200 billion in US products over two years, above the levels purchased in 2017, before Trump launched his offensive, including an additional $32 billion in agricultural goods.

Washington will be monitoring the purchases so China will have to make sure that "nothing with tariffs or non-tariff barriers prevent that from happening," the official said.

Trump has repeatedly touted the trade pact as a boon for American farmers, who were hit hard by the tariff war.

Soybean exports to China plunged to just $3 billion from more than $12 billion in 2017 and the Trump administration paid out $28 billion in aid to farmers in the last two years. (AFP)