“We’re putting the trade war on hold,” Treasury Secretary Steven Mnuchin said Sunday after the two sides released a joint statement a day earlier. “Right now, we have agreed to put the tariffs on hold while we execute the framework.”

For now, Mnuchin’s ceasefire declaration will soothe the nerves of investors worried that the world’s two biggest economies were on the verge of an all-out trade conflict. President Donald Trump had threatened to slap tariffs on up to $150bn in Chinese imports, and Beijing vowed to respond in kind.

But the statement — released on Saturday after two days of talks between Chinese Vice Premier Liu He and senior American officials, including Trump — isn’t seen as a panacea to the months-long conflict.

“As this process continues, the United States may use all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations.”

The truce is “little more than a brief de-escalation of tensions,” said Eswar Prasad, a trade policy professor at Cornell University and former head of the IMF’s China unit. “The fundamental differences on trade and other economic issues remain unresolved.”

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