The United States and China announced on Monday a temporary agreement to reduce mutual tariffs for a 90-day period, aiming to alleviate escalating trade tensions between the world’s two largest economies.

Under the deal, the US will lower tariffs on Chinese imports from 145% to 30%, while China will reduce tariffs on American goods from 125% to 10% for the same duration.

The announcement followed high-level talks held in Geneva, led by US Treasury Secretary Scott Bissent and Chinese Vice Premier He Lifeng.

A joint statement issued by both nations emphasized the significance of bilateral economic and trade relations and noted the establishment of a mechanism to continue negotiations on trade and economic issues after the truce period.

The move was met with positive reactions in global financial markets, with major stock indices in the US, Asia, and Europe registering significant gains. The US dollar also strengthened against major currencies.

This agreement comes amid heightened trade tensions between the two nations, which have previously imposed steep tariffs on each other’s goods, negatively impacting global markets.