The United States and China have agreed to significantly roll back tariffs on each other’s imports, marking a major breakthrough in their ongoing trade war. The deal, reached after two days of talks in Geneva, Switzerland, will see Washington reduce tariffs on Chinese goods from 145% to 30% for some items, while China will cut its tariffs to 10% from 125%.

According to the agreement, both countries will maintain a 10% reciprocal tariff rate. US Treasury Secretary Scott Bessent said, “We have reached an agreement on a 90-day pause and substantially move down the tariff levels.” US Trade Representative Jamieson Greer added that the US and China will retain a 10% reciprocal tariff rate as part of the agreement.

The 90-day pause will see the effective tariff on Chinese goods entering the US at 30%, while China’s effective tariffs will be at 10% for the duration of the pause. The changes will come into force shortly.

The White House described the deal as a “historic trade win” for the United States, saying it aims to correct trade imbalances and deliver lasting benefits to American workers, farmers, and businesses. “President Donald J. Trump reached an agreement with China to reduce China’s tariffs and eliminate retaliation, retain a US baseline tariff on China, and set a path for future discussions to open market access for American exports,” the White House said.

China’s Vice Premier He Lifeng hailed the deal, saying trade talks with the US “achieved substantial progress and reached important consensus.” He added that both nations agreed to establish a mechanism to continue important discussions about trade and economics.

The agreement is seen as a significant step towards resolving the trade tensions between the two nations, which have been ongoing since January 2018. The trade war has had far-reaching consequences, including higher costs for manufacturers, increased prices for consumers, and financial difficulties for farmers.

The US government believes the deal will help level up the balance of trade between both countries. China’s Vice President He Liefeng emphasized that the agreement was reached through mutual consensus, calling it a “good deal.”