May 12, Kathmandu- The United States and China announced a 90-day deal to slash tariffs on Chinese goods, known as tit-for-tat tariffs, for a period of 10 days. The trade war between the two major economies has wreaked havoc on the world's financial markets.

The two sides have agreed to reduce tariffs by 115 percentage points, according to U.S. Treasury Secretary Scott Besant. That means a 30 percent tariff on Chinese goods imported into the United States and a 10 percent tariff on American goods imported into China.

The agreement is expected to ease a trade war that has raised fears of a global economic recession.

The world's two largest economies issued a joint statement after the first round of talks on Saturday and Sunday, after US President Donald Trump announced global tax hikes, agreeing to reduce the three-digit tariff to two-digit and continue talks.

US Treasury Secretary Steven Mnuchin said talks with Chinese Vice Premier He Lifeng and International Trade Representative Li Keqiang over the weekend were “healthy” and “productive.” “Both sides showed great respect,” Mr. Trump told reporters.

US President Donald Trump last month imposed a 145 percent tariff on imports from China and announced a 10 percent tariff on other countries. Beijing has retaliated by imposing a 125 percent tariff on US goods.

In a statement, the two sides agreed to “establish a mechanism to continue discussing economic and trade relations.” China praised the “significant progress” in the talks.

“This move is in the common interests of the two countries and the world,” the Chinese Ministry of Commerce said, adding that “the United States will continue to work with China to correct the wrong practice of unilateral tariff increases.”

The US dollar, which had been falling since US President Trump launched his tariff attack in April, has given a bright future for the US stock market, according to US media. The agreement also boosted European and Asian markets.

The trade dispute between Washington and Beijing has rattled financial markets, raising fears that the new tariffs could revive inflation and trigger a global economic slowdown.