President Donald Trump and his Chinese counterpart, President Xi Jinping, have agreed to resume trade talks, easing a long row that has contributed to a global economic slowdown.
The US and China reached agreement at the G20 summit in Osaka, Japan.
President Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession.
He had threatened additional trade sanctions on China.
However, after the meeting on the sidelines of the main G20 summit in Japan, President Trump confirmed that the US would not be adding tariffs on $300 billion worth of Chinese imports.
He also said he would continue to negotiate with China “for the time being”.
At a subsequent press conference, President Trump declared that US technology companies could again sell to China’s Huawei – effectively reversing a ban imposed last month by the US commerce department.
The US and China have been fighting a damaging trade war over the past year.
Donald Trump accused China of stealing intellectual property and forcing US companies to share trade secrets in order to do business in China, which in turn said US demands for business reform were unreasonable.
The feud escalated in the months leading up to the G20 summit, after talks between the two countries collapsed in May.
The truce signals a pause in hostilities rather than a resolution of the dispute, which has caused market turbulence and hit global growth.
President Trump said his meeting with President Xi was “excellent, as good as it was going to be,” adding: “We discussed a lot of things and we’re right back on track and we’ll see what happens.”
China’s state news agency Xinhua quoted President Xi as saying: “China and the US have highly integrated interests and extensive co-operation areas and they should not fall into so-called traps of conflict and confrontation.”
Washington has publicly said Huawei’s technology poses a national security risk, although President Trump has also linked the issue to the trade dispute.
Last month, the US banned Huawei from buying US goods without a license – including from Google, which is crucial to many of its products. The ban could cost the firm $30 billion in revenue this year.
President Trump’s decision to allow US companies to continue to sell to Huawei “where there’s no great national security problem” could be a substantial concession, although exactly how this will play out remains unclear.
He said the Huawei situation would be dealt with “at the very end” of trade talks.
The next summit is due to be held in Saudi Arabia in November 2020.
Crown Prince Mohammed bin Salman has continued to face questions in Japan over the murder in Istanbul last year of Saudi journalist Jamal Khashoggi and the matter is likely to rumble on.
The UK and Turkey are among the countries still pressing the issue, although President Trump says “no-one blames” the Saudi crown prince.