Fears of a large-scale trade war between the US and China have been dampened after talks between the two superpowers resulted in greater confidence that a compromise deal can be agreed.

US treasury secretary Steven Mnuchin said his government is willing to "put the trade war on hold" and temporarily suspend the implementation of planned tariffs on Chinese imports, following the progress made on a joint pledge to reduce the trade deficit between the nations.

A joint US-Chinese statement issued after the most recent talks suggested that China will be committing to an effort to "significantly increase" its imports of US goods, although an exact figure has not been placed on this.

As of last year, the US goods trade deficit with China stood at $376 billion (€320.12 billion), with comments from Larry Kudlow, the top economic adviser to American president Donald Trump, indicating that the US is looking to reduce this by around $200 billion.

The countries have also agreed on "meaningful increases” in US agricultural and energy exports to China, while China is also amenable to amending relevant laws and regulations, including its patent law, to address US intellectual property complaints.

These compromises will prove sufficient to allay short-term fears of the recent trade conflict between the world's two largest economies from escalating, and will mean that neither nation will go ahead with imposing tariffs on each other in the immediate future.

However, a statement from US trade representative Robert Lighthizer highlighted the fact that this remains a potential outcome, with more crucial talks yet to come. He said: "As this process continues, the US may use all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations. Real structural change is necessary; nothing less than the future of tens of millions of American jobs is at stake."