The United States and China announced on Monday that they have reached an agreement to temporarily reduce reciprocal tariffs. This move comes as the two largest economies in the world aim to resolve a trade conflict that has unsettled global prospects and caused instability in financial markets.

Following discussions with Chinese representatives in Geneva, US Treasury Secretary Scott Bessent informed the media that both parties had consented to a 90-day suspension of certain actions, with tariffs set to decrease by more than 100 percentage points to a rate of 10%.

“Both nations have effectively represented their national interests,” Bessent stated. “We both share a commitment to achieving balanced trade, and the US will persist in progressing towards that goal.”

Bessent was speaking alongside US Trade Representative Jamieson Greer after the weekend talks in which both sides had hailed progress on narrowing differences.

The Geneva meetings were the first face-to-face interactions between senior US and Chinese economic officials since US President Donald Trump returned to power and launched a global tariff blitz, imposing particularly hefty duties on China.

Since taking office in January, Trump has hiked the tariffs paid by US importers for goods from China to 145%, in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration.

China hit back by putting export curbs on some rare earth elements, vital for US manufacturers of weapons and electronic consumer goods, and raising tariffs on US goods to 125%.

The tariff dispute brought nearly $600 billion in two-way trade to a standstill, disrupting supply chains, sparking fears of stagflation and triggering some layoffs.

Financial markets have been looking out for signs of a thaw in the trade war and Wall Street stock futures climbed and the dollar firmed against safe haven peers on Monday as the talks boosted hopes a global recession might be avoided.