China and the United States have agreed to suspend 90 days for the deepening trade war, which threatens to subvert the global economy, with reciprocal tariffs set to 115 percentage points lower.

U.S. Treasury Secretary Scott Bessent spoke to the media after his talks in Geneva. The two sides showed "great respect" in the negotiations.

"The consensus between the two delegations this weekend is not expected to be decoupled," Bessent said.

The 90-day tariff reduction applies to the duties announced by Donald Trump on April 2, eventually upgrading to 125% on most Chinese imports, with Beijing taking the same steps.

China has also adopted non-tariff measures, such as limiting the export of key minerals that are crucial to the U.S.-made high-tech goods.

U.S. Trade Representative Jamieson Greer said China’s retaliation was disproportionate and constituted an effective embargo on trade between the world’s two largest economies.

With a 115 percentage point deduction, China's tariffs on U.S. goods will be reduced to 10%, while the U.S. taxes on Chinese goods will be reduced to 30%. That's because U.S. tariffs include a 20% interest rate Trump imposed before the recent trade war, which the president said is related to China's role in the U.S. fentanyl crisis. Tariffs related to fentanyl will still apply.

A spokesperson for the Ministry of Commerce of China said: "This move is in line with the expectations of producers and consumers in both countries, as well as the common interests of the country and the world.

"We hope that the United States will continue to move towards China in the same direction according to this meeting, completely correct the wrong practice of unilateral tariff hiking, and continuously strengthen mutually beneficial cooperation."

Chinese elements jumped to a six-month high, indicating that the trade war would be suspended. According to some estimates, as many as 16 million jobs are at risk in China, while tariffs from the largest U.S. commodity suppliers are dazzling, while the U.S. faces rising inflation and empty shelves.

Bessent said he was deeply impressed by China's participation in the fentanyl issue during the talks in Switzerland. "For the first time, China understands the scale of what is happening in the United States," Bescent said.

A joint statement issued by the United States and China on Monday said that both sides will "continue to advance related work with a spirit of mutual openness, continuous communication, cooperation and mutual respect."

William Xin, chairman of the hedge fund Spring Mountain PU Investment Management, told Reuters: "The results are far beyond the market expectations. In the past, I hoped that both sides could sit down and talk, the market was very fragile. Now, there is more certainty. Chinese stocks and Yuan will work for a while."

Hu Jinen, former editor of the nationalist China tabloid Global Times, said on social media that the agreement was a "huge victory in China's upholding the principles of equality and mutual respect." Hu pointed out on Weibo that the recently agreed British trade agreement maintained a 10% tariff on U.S. imports, "although the UK has not implemented reciprocity measures."

"This is an unexpected achievement of China's tariff negotiations," said Wang Wen, head of the Institute of Finance at Renmin University of Beijing.

However, Wang also urged caution because the agreement he said "does not represent the resolution of structural contradictions between China and the United States, nor does it mean that there will be no friction and serious differences between China and the United States in the future."

European stock markets rose after the U.S.-China announcement. Germany's DAX index jumped nearly 1% thanks to Mercedes-Benz, Daimler Trucks and BMW were the biggest boosters. France's CAC 40 index rose 1.3%. Danish Transport Group shares rose 12%.

Brent's crude oil rose nearly 3% to $65.75 a barrel, while the U.S. dollar index (the Green Guard measuring a basket of currencies) jumped 1.2%.

After announcing the U.S.-China deal, Dutch Bank analysts canceled their forecast for China's growth this year. Ing predicts that exports from China to the United States will return to China's economic growth of 4.7% this year.

Other research by Lillian Yang