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The US and China have agreed to reduce tariffs for the next 90 days amid a massive breakdown of the trade war between the two biggest economies of the world.
As part of the contract attacked in Geneva over the weekend, the US will reduce tariffs on Chinese products from 145% to 30%, while China will reduce US import duties from 125% to 10%.
Global Stocks extended its profits after the announcement, with S&P 500 futures up 2.8%.
The US dollar won 0.7% against a basket of peer fees, while gold, a safe haven asset, fell 2.3%.
“We want a more balanced trade and I think both sides are committed to achieving that,” U.S. Treasury Secretary Scott Bescent said at a briefing in Geneva on Monday. “Neither side wants decoupling.”
Washington and Beijing have been trapped in an escalating trade war since early April, when President Trump imposed additional tariffs on Chinese imports and led retaliation measures from Beijing.
The punitive obligation is destroying trade between countries, and Bescent acknowledged last month that the situation is unsustainable.
The agreement is just the first step towards reaching a more permanent deal, but represents the first indication of economic tensions that will be eased between the two economic superpowers.
Bescent and US trade representative Jammyson Greer represent the White House in Geneva Talks, and his LIFON, the vice-president of China, led a delegation in Beijing.
Prior to talks in Geneva, Bescent had warned that the level of tariffs between the US and China would amount to an effective trade “emergency.”
US business leaders, including JPMorgan CEO Jamie Dimon, have urged Beijing and Washington in recent weeks to hold consultations as a sign of economic damage caused by stand-off mounts.
In a meeting with Trump, top Walmart executives and Target warned that tariffs would lead to empty shelves in stores.
However, until recently there were few indications that either country was willing to negotiate.
