US and China have agreed to cut tariffs by 115% for 90 days, after trade talks were held in Geneva from May 10 to 11.
The US had lifted its tariffs on Chinese imports to 145%, while China imposed 125% tariffs on US imports prior to the agreement.
US treasury secretary Scott Bessent told reporters both sides had an “interest in balanced trade”.
China-US economic and trade leader and vice president of the state council He Lifeng said: “Through the joint efforts of China and the United States, the talks were fruitful, an important step was taken to resolve differences through dialogue and consultation on an equal footing, and the foundation and conditions were laid for further bridging differences and deepening cooperation."
The stock market reacted well to the trade agreement, with S&P 500 futures climbing nearly 3% as of 10:50am GMT on May 12.
Amid mounting trade tensions prior to the deal, China had returned two Boeing 737 jets to the Seattle factory. Around 50 jets were due to be delivered to China through 2025. Air India, Malaysia Airlines, and Riyadh Air had previously expressed interest in this inventory. It remains to be seen what this trade agreement will mean for aircraft deliveries to China.