What you need to know:
- US President Donald Trump and China's President Xi Jinping reached the agreement at the G20 summit in Japan.
- Mr Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession.
- The resumption of talks and pressing the pause button on more tariffs will be seen in the short term as positive for markets and American businesses.
- The truce signals a pause in hostilities between the world's largest economies, rather than a resolution of the year-long dispute which has caused market turbulence and dragged on global growth.
The US and China have agreed to resume trade talks, easing a long row that has fuelled a global economic slowdown.
US President Donald Trump and China's President Xi Jinping reached the agreement at the G20 summit in Japan.
Mr Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession.
Ahead of the G20 summit Mr Trump had threatened an additional $300 billion (£236 billion) in tariffs on Chinese imports.
However after the meeting on the sidelines of the main summit in Osaka, he confirmed that Washington would not be adding the additional tariffs, and that he would continue to negotiate with Beijing "for the time being".
And at a subsequent press conference, the US president declared that US technology companies could again sell to China's Huawei - effectively reversing a ban imposed in May by the US commerce department.
The ban prevented US tech firms from selling to Huawei, crippling the Chinese firm's ability to get critical American technology to help it make its products.
President Trump has positioned his trade talks with his Chinese counterpart as a win for the US - but he may have also given Beijing exactly what it wants on Huawei.
It is still not clear whether what Mr Trump has announced is a complete reversal - but if it is, it would be a significant concession by the US on a company that Washington has said is a threat to national security.
The resumption of talks and pressing the pause button on more tariffs will be seen in the short term as positive for markets and American businesses.
Those have already complained about the cost of further tariffs saying that if they had gone ahead - American consumers would have ended up paying something like $12bn more in higher prices
Chinese businesses have been suffering too - the trade war has hit investment plans, business confidence, and exports in the world's second largest economy
But pressing pause doesn't mean the trade war is over. Tariffs on hundreds of billions of dollars worth of goods are still in place. And the two sides still have much to agree on.
Washington wants Beijing to fundamentally change the way China's economy has grown over the last four decades - get rid of subsidies to state owned companies, open up the domestic market and most importantly, hold China to account if it fails to deliver on any of these commitments.
But Beijing has already publicly said that it won't budge on issues of principle or bow to US pressure.
How the two sides close that gap will be the real test of any trade truce. For now - it is a positive thing that they're talking again. But talking can only take you so far.
US and China - the world's two largest economies - have been fighting a damaging trade war over the past year.
Mr Trump accused China of stealing intellectual property and forcing US firms to share trade secrets in order to do business in China.
China, in turn, said the US's demands for business reform were unreasonable.
The feud escalated in the months leading up to the summit, after talks between the two countries collapsed in May.
The truce signals a pause in hostilities between the world's largest economies, rather than a resolution of the year-long dispute which has caused market turbulence and dragged on global growth.
Speaking after his meeting with Mr Xi at the summit, the US president said negotiations were "back on track".
"We had a very good meeting with President Xi of China, excellent, I would say excellent, as good as it was going to be," Mr Trump told reporters. "We discussed a lot of things and we're right back on track and we'll see what happens."
In a statement, China's foreign ministry said negotiators from both sides would discuss the specific details, but did not elaborate.
China's official state news agency Xinhua also quoted Mr Xi as saying: "China and the US have highly integrated interests and extensive co-operation areas and they should not fall into so-called traps of conflict and confrontation."
The clampdown on dealing with Huawei has been a high profile part of the wider trade conflict between the US and China.
Mr Trump's decision to allow US companies to continue to sell to the Chinese technology firm is being seen as a substantial concession to the Chinese.
The US president is reversing a US ban imposed last month on Huawei buying US goods without a licence - including from Google, which is crucial to many of the Chinese firm's products.
The ban had been expected to cost the firm $30 billion (£24 billion) in revenue this year, and sparked fears of a "technology cold war" between the two nations.
But American companies have also been stopped from buying from Huawei, because Washington says its technology poses a national security risk.
So the latest US move does not bring a complete end to the dispute. Mr Trump said the Huawei situation would be dealt with "at the very end" of trade talks between the US and China.