China and the US have temporarily agreed to lower tariffs on each country for 90 days, according to a joint statement released from Geneva.

Washington has agreed to lower tariffs on Chinese goods to 30 per cent from 145 per cent for 90 days, while Beijing said it would cut its levy on US goods to 10 per cent from 125 per cent for the same period of time, according to the statement and officials in a briefing Monday.

“We had a very robust and productive discussion on steps forward on fentanyl,” US Treasury Secretary Scott Bessent said. “We are in agreement that neither side wants to decouple.”

The statement also said the parties would establish a mechanism to continue discussions about economic and trade relations.

US futures jumped on the news, with S&P 500 rallying 2.8 per cent minutes after the deal was announced. Contracts for the Nasdaq 100 are up 3.5 per cent.

The announcement represents a step toward de-escalating a tariff war that had erased trillions of dollars from financial markets and resulted in a slump in trade between the world’s two-largest economies.

Both countries had earlier reported “substantial progress” in their talks, which had buoyed markets and helped Chinese stocks recoup their losses since President Donald Trump’s “Liberation Day” announcement of tariffs on April 2.

Trade Representive Jamieson Greer said the US wanted to have more balanced trade with China.

While the White House called the agreement a “trade deal” in an initial statement on Sunday, it is still unclear what an acceptable goal is for both sides or how long it will take to get there.

With Bloomberg