Amid ongoing negotiations, the United States and Communist China have agreed to suspend most tariff hikes.
Both nations have agreed to a 90-day cooling-off period while formal negotiations continue.
The agreement was announced on Monday in a joint statement following two days of high-level talks in Geneva, Switzerland.
Delegations from both governments convened in Geneva to address mounting economic tensions.
Under the terms of the deal, the U.S. will reduce its reciprocal tariff on Chinese imports to 10 percent.
This is a massive reduction from the 125 percent level imposed during the height of the trade standoff earlier this year.
China will match that move by lowering its own tariff on U.S. goods to 10 percent, also from 125 percent.
Beijing also agreed to suspend non-tariff countermeasures that had been enacted since early April.
However, not all of the tariffs were lifted.
A separate 20 percent tariff that President Donald Trump imposed on China will remain in place.
The tariff was imposed over China’s role in supplying illicit drug manufacturers with key ingredients for fentanyl.
Both sides described the moves as initial steps toward a more “sustainable, long-term, and mutually beneficial” trade relationship.
They pledged to continue talks through a newly created bilateral mechanism.
Chinese Vice Premier He Lifeng is leading Beijing’s delegation.
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are representing the United States.
“The Parties recognize the importance of their bilateral economic and trade relationship to both countries and the global economy,” the statement said.
The statement added that discussions would proceed “in the spirit of mutual opening, continued communication, cooperation, and mutual respect.”
The agreement pauses a rapid escalation in trade barriers that began in April.
Trump imposed sweeping new tariffs on Chinese imports.
The move raised total duties as high as 145 percent on some goods.
Beijing responded in kind, and bilateral trade flows plummeted in recent weeks.
The situation has been contributing to fears of rising inflationary pressures in the U.S. and disrupting Chinese exports.
Monday’s deal marks the first major step back from confrontation.
However, both sides emphasized that the tariff suspensions are temporary and subject to further negotiations.
Nevertheless, the news is a welcome relief for investors.
The U.S. Stock Market lit up green ahead of opening on Monday morning.
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