Italian pasta will be exempt from high US tariffs that the Trump administration has threatened 13 producers with.
The move could result in American importers being taxed at a rate higher than the cost of the pasta itself, and prices for American consumers rising sharply.
But Italy's foreign ministry said on Thursday that the proposed rate had now been sharply reduced.
In its own statement, the US said the 13 firms had resolved many of its concerns. It has previously accused companies of selling their products at unreasonably low prices and threatened tariffs of nearly 92%.
Tariffs are a type of tax paid by consumers who import a product.
Since returning to the White House last year, US President Donald Trump has rolled out a sweeping program of these taxes, although some have since been eased.
The president has sought to address trade practices he views as harmful to the United States and boost American manufacturing.
But economists have consistently warned that such moves could end up raising costs for consumers, exacerbating cost-of-living problems.
In the case of pasta, the US argued that Italian-made goods were being sold in the US at “below normal prices,” undermining local producers. This pricing policy is sometimes called dumping.
The Commerce Department planned to impose a tariff rate of 91.74% on American imports of pasta made by 13 Italian manufacturers.
Given that there is currently a base tariff of 15% on most products purchased into the US from the European Union, this plan would result in the tax rate on pasta exceeding 100% of its value.
That has raised concerns that consumers will face significant price increases, even though the products made by the 13 companies represent only a small fraction of the total Italian pasta imported into the United States.
The plan would also be a political headache for Italian Prime Minister Giorgia Meloni, who has a relatively close relationship with Trump among European leaders.
On Thursday, Italy's Foreign Ministry announced that the US had scrapped its plan, saying it represented “recognition by US authorities of the constructive cooperation shown by Italian companies.”
Italy's statement added that in the case of one brand, La Molisana, the tariff rate was reduced to 2.26%. Others will face slightly higher rates, up to 13.98%.
In a statement shared with BBC's US partner CBS News, a US Commerce Department spokesman said: “[Our] The post-preliminary analysis shows that Italian pasta makers have addressed many of the Commerce Department's concerns raised in the preliminary opinion.
“Commerce will continue to engage with stakeholders to take all information into account before making a final decision.”
Other Trump tariffs that have recently been eased include a planned increase in the import tax on furniture items, which was delayed 12 months shortly before it was due to take effect on New Year's Day.
And in November, the president signed an executive order that allowed some key food products, including coffee, bananas and beef, to be exempt from his tariffs.
