President Donald Trump has put tariffs on Chinese goods on hold following negotiations between the US Treasury department's Steve Mnuchin. The news means that a trade war between the two superpowers has been averted – for now.

Mnuchin has engaged in two days of talks with Chinese officials and is now claiming that the USA has won several commitments from the Chinese that should cut the trade deficit between the two nations (without imposing tariffs). Currently, the USA has a trade deficit with China of US$378 billion (£278bn) and there has been talk that the USA is pushing for a $200bn reduction, something the Chinese have not agreed to, according to online media reports.

The worry has always been that the Chinese would engage in a tit-for-tat exercise by imposing tariffs on US goods – namely soy beans, cars and chemicals. As the reality of a trade war between the two countries loomed, an eleventh hour deal appears to have been struck.

Whether this will have any effect on Trump's recently announced Section 232 tariffs on imported steel and aluminium is unclear.

Ever since Trump announced the imposition of 25% tariffs on imports of steel, the US industry has been 100% behind the President and in a very gung-ho and bullish frame of mind, urging him to keep on track and not falter. Steelmakers have talked about restarting idled mills and the general climate has been one of optimism all round. The mood might change if it turns out that Trump's lifting of tariffs on China includes the Section 232 tariffs on steel.