President Donald Trump and Chinese President Xi Jinping agreed to a new cease-fire Saturday in a yearlong trade war during their meeting on the sidelines of a conference in Japan, averting, at least for now, an escalation feared by financial markets and the business community while negotiations continue.

Trump said U.S. tariffs in place against Chinese imports will remain, but that new tariffs he's threatened to slap on billions worth of other Chinese goods will not be triggered for the "time being." He announced that U.S. and China would restart stalled trade talks, saying, "we're going to work with China where we left off."

Trump spoke after a lengthy meeting with Xi on the margins of the Group of 20 summit in Osaka, Japan. The leaders had sought to find an off-ramp to a burgeoning trade war between economic powerhouses despite doubts about their willingness to compromise on a long term solution.

Trump had said earlier that relations with China were "right back on track."

The apparent truce marks a pattern for talks between Trump and Xi, who have professed their friendship with each other and hit the pause button on protectionist measures after their conversations, only to see negotiations later break down over the contentious details.

The meeting that ultimately led to the cease-fire marked the centerpiece of four days of diplomacy for Trump, whose re-election chances have been put at risk by the trade war that has hurt American farmers and battered global markets. Tensions rose in recent weeks after negotiations collapsed last month.

Climate fight

There were no immediate details about the China-US discussions, including whether they raised the thorny subject of Chinese telecoms firm Huawei.

Washington has banned the company over security concerns and China reportedly wanted the restrictions lifted under the terms of any trade truce.

The first tete-a-tete between the leaders of the world's top two economies since the last G20 in December has cast a long shadow over this year's gathering in Osaka.

Economists say that a lengthy trade war could be crippling for the global economy at a time when headwinds including increased geopolitical tensions and Brexit are blowing hard.

On Friday, the European Union and the South American trade bloc Mercosur sealed a blockbuster trade deal after 20 years of talks, with European Commission President Jean-Claude Juncker hailing it as a "strong message" in support of "rules-based trade."

Trade has proved far from the only contentious issue on the table, with climate change becoming another major sticking point.

A diplomatic source said it had been a "difficult" night, with an American negotiator pushing a "very tough position" and a group including France standing united against watering down the climate language in the final statement.

In the end, a deal of sorts was reached, with 19 members, minus the United States, agreeing Saturday to the "irreversibility" of the Paris climate deal and pledging its full implementation.

The language in the final statement after the summit in Japan's Osaka mirrors that agreed during last year's G20, but was the subject of lengthy negotiations after objections from the United States.

Trump-Kim meet?

Trump has dominated the headlines from the summit, and once again caught observers by surprise by tweeting early Saturday that he was open to meeting North Korea's Kim Jong Un while in South Korea this weekend.

"If Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!," he wrote.

Several experts, however, said the focus on Trump and the talks with China struck at the heart of the G20 format, created to craft a united global response to the Lehman Brothers crisis.

"With much of the fate of the global economy and the likely direction of markets hanging on the outcome of this pivotal Trump-Xi meeting, we think things will get worse before they get better," said ING Economics.

And the focus on bilateral meetings on the sidelines of the summit once again sparked doubts about the future of the gathering, experts said.

"The G20 was created as a forum for cooperation and the question may well be 'have we reached the point where it can no longer serve that purpose'," Thomas Bernes from the Centre for International Governance Innovation told AFP.