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China and the US are reportedly very close to resolving a key sticking point to a trade deal

Chinese Vice Premier and lead trade negotiator Liu He, right, reaches to shake hands with U.S. Trade Representative Robert Lighthizer before the opening session of trade negotiations at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019.
Mark Schiefelbein | Pool | Reuters

The U.S. and China have partly agreed on how to deal with the tariffs already in place, Politico reported Wednesday.

The Trump administration will "immediately" remove a 10% tariff on a portion of the $200 billion worth of Chinese imports when a deal strikes, which is expected to be signed by the end of next week, Politico reported, citing one person familiar with the matter.

The 10% tariff on the rest of the Chinese goods will also be lifted "quickly," the person said. However, a 25% tariff the U.S. imposed on roughly $50 billion-worth of other Chinese goods will likely stay in place until after the 2020 election, according to the source.

The existing tariffs have been a key sticking point in the trade negotiations as the U.S. seeks to make any deal enforceable. President Donald Trump previously said he would use the existing tariffs as an enforcement tool, while China has been pushing for the removal of the duties as part of the deal.

Expectations that China and the U.S. will reach a trade deal have increased in recent months, boosting U.S. equities along the way. is up more than 17% year to date and reached an intraday record earlier on Wednesday. The Politico report seemed to boost major averages slightly on Wednesday.

White House chief of staff Mick Mulvaney said Tuesday the trade talks will be resolved "one way or the other" within the next two weeks, CNBC reported.

Worries that a prolonged trade war between the world's largest economies kept investors on edge for most of 2018 as they feared a slowdown could lead to lower corporate profits and a global economic slowdown.

— CNBC's Fred Imbert contributed reporting.

Read the original Politico report here.