The United States and China have agreed a deal to temporarily slash reciprocal tariffs as the world's two biggest economies seek to end a damaging trade war that has stoked fears of recession and set financial markets on edge.

The US is cutting tariffs on Chinese goods from 145% to 30% while China is chopping its levies on American imports from 125% to 10%.

"We have reached an agreement on a 90-day pause and substantially moved down the tariff levels," US Treasury Secretary Scott Bessent said.