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

Donald Trumphas backed down in his trade war with China after announcing a reduction of tariffs for an initial 90 day period. A joint statement from the White House said the nations recognised "the importance of their bilateral economic and trade relationship to both countries and the global economy".