China and the United States have agreed to suspend some of the heavy trade tariffs imposed against one another as they prepare to extend negotiations aimed at averting a trade war.

The two countries issued a joint statement on Monday, following two days of trade talks in Geneva, Switzerland. The pair described the negotiations, which came after President Donald Trump’s nationalist agenda sparked a spiral of increasingly heavy duties, as positive.

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Global markets reacted positively to the news, with stock markets in Hong Kong, US and Europe rising.

In the statement, Beijing and Washington said that they recognise the importance of their bilateral economic and trade relationship to both their two countries and the global economy.

They said that they will move forward “in the spirit of mutual opening, continued communication, cooperation, and mutual respect”.

As part of the agreement, the US will suspend its additional ad valorem rate of duties – tax based on value of goods – by 24 percent for an “initial” period of 90 days. This will leave a 10 percent tariff rate in place.

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China will reduce its duties on US imports by a similar amount, also retaining a tariff of 10 percent.

Washington will also roll back tariffs imposed by two executive orders signed by Trump in early April, impacting a wide range of US imports of goods from China, including Hong Kong and Macau.

Beijing will suspend tariffs imposed in response and “suspend or remove the non-tariff countermeasures” taken against the US.

The world’s two largest economies also agreed to establish a mechanism to continue discussions about economic and trade relations, and named officials to lead the talks.

Vice-Premier of the State Council He Lifeng will be China’s top negotiator. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will lead the talks for the White House.

“These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” the joint statement reads.

Bessent told reporters in Geneva that “both sides will move down reciprocal tariffs” by up to 115 percent on some goods, after successful meetings during which the two delegations exhibited “great respect” for each other.

“The consensus from both delegations is neither side wants to be decoupled,” Bessent said, adding that the tariffs were the equivalent of an embargo, something neither side favoured.

Global markets had fallen considerably amid the trade wars launched by the Trump administration as uncertainty grew over the potential impact of the tariffs.

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However, signs of a pullback have been seen in recent weeks.

The agreement with China comes days after the US reached a framework for a trade agreement that would re-set most of Washington’s tariffs on imports from the United Kingdom.