In a major breakthrough, the US and China have agreed to dramatically cut tariffs on each other’s goods for 90 days, easing tensions from their prolonged trade war. The US will lower tariffs on Chinese imports from 145% to 30%, while China will cut duties on US goods from 125% to 10%, effective May 14. However, US fentanyl-related tariffs will remain intact.

The deal includes the formation of a bilateral trade working group to sustain dialogue. Global markets reacted with optimism, with sharp gains in US and Asian indices.