GENEVA (AP) — The United States and China agreed on Monday to reduce the high taxes they recently placed on goods. This decision allows trade between the world's two biggest economies to start again and has caused global financial markets to improve.

However, the decrease in President Donald Trump's trade disagreements did not fix the main problems between Beijing and Washington. The agreement is for 90 days, which gives American and Chinese negotiators time to make a better deal. But this pause also means that taxes on imported goods are still higher than before Trump started raising them last month. And businesses and investors have to deal with the uncertainty of whether this temporary peace will continue.

U.S. Trade Representative Jamieson Greer said the U.S. will lower the 145% tax Trump put in place last month to 30%. China also agreed to lower its tax on U.S. goods from 125% to 10%.

Greer and Treasury Secretary Scott Bessent said they would lower tariffs at a press conference in Geneva.

Officials sounded positive, saying they had planned meetings to keep talking about their trade problems. Bessent said the very high taxes on goods from last month, which made things worse after Trump started it, were like stopping trade completely, and neither country wanted that; they wanted trade.

The US is now putting a 30% tax on goods from China. This 30% tax includes a 20% tax that was already there. The older 20% tax was put in place to make China work harder to stop the drug fentanyl from coming into the US. The 30% tax also includes a basic 10% tax, which is the same tax rate the US puts on imports from most other countries. This 30% tax is added to other taxes that are already on goods from China. Some of these other taxes were started by the previous president and are still being used by the current president.

Trump increased the total tax to 145% last month because he was angry that China was reacting, but he changed his mind on Monday.

China’s Commerce Ministry said the agreement was a big step towards solving the disagreements between the two countries and helps prepare for future cooperation.

A ministry statement said this plan fits with what producers and consumers in both countries want and helps the interests of both nations and the world.

The statement from both countries said China would also stop or change other actions it has taken since April 2 because of the US tariffs. China has put more limits on selling rare earths, which are important for defense, and has added more American companies to its lists, making it harder for them to do business with or in China.

Markets go up as the two sides become less angry.

We still don't know the full effect of the complex taxes and trade rules put in place by Washington and Beijing. A lot depends on whether they can find ways to solve their old problems during the 90-day break.

Bessent told CNBC that officials from the U.S. and China plan to meet again in a few weeks.

However, investors were happy because trade representatives from the world's two biggest economies changed their position.

The S&P 500 and Dow Jones Industrial Average went up a lot. Oil prices also increased, and the dollar became stronger against the euro and yen.

"This is a big step down in tension," said Mark Williams, chief Asia economist at Capital Economics. But he warned "it's not certain that the 90-day deal will lead to lasting peace."

According to Dani Rodrik, an economist at Harvard University, the two countries stopped a trade war they didn't need. However, the US still has high taxes on goods from China, about 30%, and this will mostly hurt people who buy things in the US.

According to Rodrik on Bluesky, Trump caused a lot of problems with China but didn't get anything good from it.

Craig Singleton, a senior expert on China, thought the quick agreement meant both sides had more money problems than they said.

China had big economic problems: many people lost their jobs, money left the country fast, and companies got much fewer orders from other countries, Singleton said. For Trump, the stock market was important, and this deal helps him win without losing his power.

After the U.S. and China made their announcement, stock prices increased quickly. For example, U.S. futures went up by more than 2%, Hong Kong’s Hang Seng index rose by almost 3%, and stock markets in Germany and France each went up by 0.7%.

Lowering very high tariffs to just high ones, and not being sure about future tariffs, will still make it harder for trade and investment to flow between the two countries, according to Eswar Prasad, a professor at Cornell University.

He said this is a good sign for the global economy because U.S. taxes on imports might become big problems for trade, but not impossible ones to overcome.

Jay Foreman, the head of Basic Fun, a toy company in Florida that makes toys like Care Bears and Tonka trucks, said he was happy that the tax on Chinese goods is now 30%. But he wants it to go down to 10%.

Foreman explained that he had told his team in China to send out the toys, which they had stopped sending in early April. He said that before Monday’s agreement, he thought he would need to make prices twice as high, but prices will still increase by 10% to 15% in the third and fourth parts of the year.

It's like they gave us something bad and thought we would be happy with something else bad, Foreman said.