GENEVA (AP) — Officials from the U.S. and China announced on Monday that they have negotiated an agreement to reduce the majority of their recently implemented tariffs, establishing a 90-day pause in their trade conflict to allow for further discussions aimed at solving their trade disputes.

Stock markets rose sharply as the globe’s two major economic powers took a step back from a clash that has unsettled the global economy.

Jamieson Greer, the U.S. Trade Representative, stated that the U.S. has consented to cut its tariff rate on Chinese imports from 145% down to 30%, a reduction of 115 percentage points, while China has likewise agreed to decrease its tariff rate on U.S. imports to 10%.

Greer and Treasury Secretary Scott Bessent announced the tariff reductions at a news conference in Geneva.

The two officials struck a positive tone as they said the two sides had set up consultations to continue discussing their trade issues.

Following two days of negotiations, Bessent mentioned at a press briefing that the high tariff rates would have essentially blocked all goods from being traded between the two countries, an outcome neither nation desires.

“The consensus from both delegations this weekend is neither side wants a decoupling,” Bessent said. “And what had occurred with these very high tariff … was an embargo, the equivalent of an embargo. And neither side wants that. We do want trade. We want more balanced trade. And I think that both sides are committed to achieving that.”

Trump last month raised U.S. tariffs on China to a combined 145% and China retaliated by hitting American imports with a 125% levy. Tariffs that high essentially amount to the two countries boycotting each other’s products, disrupting trade that last year topped $660 billion.

The announcement by the U.S. and China sent shares surging, with U.S. futures jumping more than 2%. Hong Kong’s Hang Seng index surged nearly 3% and benchmarks in Germany and France were both up 0.7%

The Trump administration has imposed tariffs on countries worldwide, but its fight with China has been the most intense. Trump’s import taxes on goods from China include a 20% charge meant to pressure Beijing into doing more to stop the flow of the synthetic opioid fentanyl into the United States.

The remaining 125% involve a dispute dating back to Trump’s first term and comes atop tariffs he levied on China then, which means the total tariffs on some Chinese goods can exceed 145%.