The United States of America and China on Monday agreed to suspend most tariffs on each other’s goods, signaling a de-escalation in trade tensions between the world’s two largest economies.

“We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process,” U.S. Treasury Secretary Scott Bessent said in a news conference.

“We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%.”

The meeting marks the first significant progress in months, following a period of rising economic tensions driven by 145% tariffs on Chinese imports and 125% levies on American goods.

“The United States has a massive $1.2 billion trade deficit. So the president declared a national emergency and imposed tariffs,” U.S. Trade Representative, Jamieson Greer stated.

“We are confident that the deal we struck with our Chinese partners will help us to work toward resolving that national emergency.”

Chinese Vice-Premier He Lifeng told reporters that both parties agreed to create a trade consultation mechanism, facilitating continuous dialogue to address differences through mutual cooperation.

“We want to make the pie of cooperation bigger with the U.S.,” He Lifeng noted, reinforcing China’s willingness to improve economic relations while navigating its own strategic interests.

The U.S.-China trade war has caused market instability, with retailers warning that tariffs could result in higher prices, supply chain disruptions, and empty store shelves.

Economists warn that prolonged tensions may fuel inflation and heighten the risk of a recession, making it urgent to find a resolution.