The United States and China have agreed to a 90-day pause on new tariff hikes, giving both sides more time to negotiate and sparing businesses from a costly escalation just before the holiday shopping season.

US President Donald Trump announced on Monday that he had signed an executive order delaying higher tariffs until November 10. In his statement, Trump said China was taking “significant steps” to address trade imbalances and national security concerns, and talks between the two countries would continue.

China responded early Tuesday with its own 90-day freeze, postponing plans to add more US companies to its trade restriction list. The Chinese Commerce Ministry described the move as a follow-through on the agreement reached by Presidents Trump and Xi Jinping during a June phone call, saying it would help support global economic stability.

The extension means planned tariff jumps — to 145% on Chinese goods entering the US and 125% on US goods entering China — will not go into effect. Current rates remain at 30% for Chinese imports into the US and 10% for US imports into China. Analysts say the planned increases would have been close to a full-blown trade embargo.

The truce is especially welcome news for retailers relying on imports of electronics, clothing, and toys ahead of Christmas. Trump also signalled optimism, noting his “good relationship” with Xi and suggesting a possible meeting before the end of the year if negotiations progress.

“This is a positive step,” said Wendy Cutler, a former US trade official. “It shows both sides are serious about exploring a broader deal that could pave the way for a high-level meeting this fall.”