The US and China are close to reaching a major trade agreement that would see a mutual lowering of some of the tariffs imposed during their bitter trade war, a report said Sunday.

Negotiators for the two economic giants have made significant progress and a final pact is close to being crafted, according to the Wall Street Journal, which quoted anonymous sources on both sides.

The American newspaper said talks last month in Washington had helped narrow differences, meaning a formal deal might be ready for signing when President Donald Trump and Xi Jinping meet in late March while the Chinese president is visiting Europe.

However, it stressed that some obstacles remain, and that the deal will likely trigger complaints from both sides that the concessions are too great.

The report said China had tentatively agreed to lower tariffs or ease restrictions on farm, chemical and auto products, among others.

Chinese negotiators have also offered to speed up the timetable for removing foreign-ownership limits on car ventures and to reduce tariffs on imported vehicles to below the current 15% rate, according to the paper.

In a move meant to respond to Trump’s repeated demands for a narrowing of America’s trade gap with China, Beijing would also increase its purchases of US goods, including a possible multi-billion-dollar purchase of natural gas from the Cheniere Energy group.

In exchange for Chinese concessions, the US would lift most of the trade sanctions it imposed last year, the report said.

The paper quoted analysts as saying that the failure of Trump’s recent summit talks with North Korean leader Kim Jong Un in Hanoi could affect the trade talks in one of two opposite ways.

It could persuade Beijing that Trump is desperate for a win, or China might take it as a sign that Trump, as his advisers say, is willing to walk away from a bad deal.

The year-long tit-for-tat trade war has imposed punishing tariffs totaling many billions of dollars on a large portion of the trade between the two countries.

– with reporting by Agence France-Presse