The United States and China announced on Monday that they have reached an agreement to reduce the tariffs imposed on each other temporarily. This development comes as the two largest economies in the world aim to resolve the trade conflict that has not only impacted the global economy but also created uncertainty in financial markets.

Speaking after talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent told reporters the two sides had agreed on a 90 day pause on measures and that tariffs would come down by over 100 percentage points to 10%.

“Both countries represented their national interest very well,” Bessent said. “We both have an interest in balanced trade, the US will continue moving towards that.”

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.