The United States and China took a step Monday to defuse the trade war between the world’s two largest economies, agreeing to temporarily reduce the punishing tariffs they have imposed on each other.

The move by the United States, after President Donald Trump had repeatedly declared that he would not lower tariffs without concessions from China, represented an acknowledgment of the costs of an all-out trade war with China. Despite the White House’s bluster, the Trump administration backed off, for now, from its steepest tariffs, and agreed to hold more formal talks with Beijing after companies and consumers started showing signs of economic strain.

Explaining that many of the tariffs that he imposed remain in place, Trump said at the White House on Monday that talks would be focused in part on “opening up” China to American businesses. He said that he expected to talk to President Xi Jinping of China this week, but that putting a full deal on paper would take a while.

“We’re not looking to hurt China,” Trump said.

In a joint statement released earlier in the day, the United States and China said they would suspend their respective tariffs for 90 days and continue negotiations they started this weekend. Under the agreement, the U.S. would reduce the tariff on Chinese imports to 30% from its current 145%, while China would lower its import duty on American goods to 10% from 125%.

The outcome of the frenzied negotiations brought tariff rates close to where they were before Trump ratcheted them higher on April 2, which he billed as “Liberation Day.” However, the talks did not appear to yield any meaningful concessions beyond an agreement to continue discussions.

“We concluded that we have a shared interest,” Treasury Secretary Scott Bessent said at a news conference in Geneva, where U.S. and Chinese officials met over the weekend. “The consensus from both delegations is that neither side wanted a decoupling.”China said it would suspend or revoke countermeasures adopted in retaliation for escalating tariffs. In early April, the Chinese government had ordered restrictions on the export of rare earth metals and magnets, critical components for cars, planes and semiconductors.

Bessent said the two countries might discuss deals for China to purchase more American goods. Such a deal could help narrow the American trade deficit with China.

The agreement breaks an impasse that had brought much trade between China and the United States to a halt. Many American businesses had suspended orders, holding out hope that the two countries could strike a deal to lower tariff rates.

Bessent placed blame on the Biden administration for failing to honor its commitments to the trade deal Trump reached with China during his first term. He said the current round of talks would aim for a more “fulsome agreement.”

Chinese factories have experienced a sharp decline in export orders to the United States, heaping additional pressure on a sluggish economy. Chinese producers looked to expand trade to Southeast Asia and other regions to circumvent the U.S. tariffs.

Bessent said the tariffs had effectively created an embargo, something neither side wanted. The two countries said continuing negotiations would involve Bessent; Jamieson Greer, the U.S. trade representative; and He Lifeng, China’s vice premier for economic policy, who led the weekend talks for the Chinese.

In a research note, Mark Williams, chief Asia economist for Capital Economics, said the agreement was “another substantial retreat from the Trump administration’s aggressive stance,” because it does not include any commitments by China on its currency or trade imbalances. He also noted that there is no guarantee that a 90-day truce will give way to a lasting agreement, especially if the United States continues trying to rally other countries to limit trade with China.

While a temporary reprieve from the shockingly high tariffs may be cause for celebration for businesses in both countries, the repercussions will linger. Businesses are likely to encounter pent-up demand, leading to higher transport prices, as companies race to schedule shipments during the 90-day negotiating window.

Global stock markets jumped with the announcement. The benchmark index in Hong Kong surged 3%, about the same amount as the S&P 500 in New York.

Zhiwei Zhang, the president and chief economist of Pinpoint Asset Management, an investment firm in Hong Kong, called the agreement a “good starting point” for both countries.