US dockworkers will return to work after a three-day strike at East and Gulf Coast ports after the union and port operators reached a tentative deal on pay and extended the current contract to January 15, both sides said Thursday.

The International Longshoremen's Association (ILA) had launched a work stoppage early Tuesday after negotiations with the United States Maritime Alliance (USMX), which represents shipping companies and terminal operators, hit an impasse.

The strike -- which involved 45,000 workers, according to the ILA -- paralyzed 36 ports from Maine to Texas, which handle an array of goods from food to electronics.

But Thursday evening, the two sides announced in a joint statement that they had "reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues.

"Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume."

The statement did not offer terms of the deal, but The Wall Street Journal, citing sources close to the matter, said USMX had proposed a 62-percent salary increase over six years, which allowed the deal to be reached.

The strike was the first walkout by the union since 1977 after negotiations stalled over union demands for significant wage increases and protection against automation-related job loss.

US President Joe Biden -- who had been under pressure to intervene in negotiations to keep ports open, but had demurred citing respect for collective bargaining rights -- celebrated the suspension of the strike late Thursday.

"I want to thank the union workers, the carriers, and the port operators for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding," Biden said in a statement.

"Collective bargaining works, and it is critical to building a stronger economy from the middle out and the bottom up."

Outside the White House, Biden added: "They've got the next 90 days, they are going to settle everything."

Republican former president Donald Trump, who is seeking to take back the Oval Office, had blamed Biden for the crisis, saying Tuesday in Milwaukee: "He should have worked out a deal."

Crisis averted

Analysts had cautioned that a lengthy strike could pose a major headwind to the U.S. economy as the presidential election grows near on November 5, leading to shortages of some items and lifting costs at a time when inflation has been moderating.

Shipping companies forced to re-route their vessels had planned to apply surcharges for each container: $1,000 each for German shipping company Hapag-Lloyd, and between $800 and $1500 for France's CMA CGM, according to German logistics platform Container xChange.

Analysts at TD Cowen said Danish giant Maersk was ready to charge up to $3,780 extra per container to cover its strike-related costs.

Oxford Economics had estimated that the strike would dent U.S. gross domestic product by $4.5 billion to $7.5 billion per week, with the overall impact depending on how long the strike lasts.

But Capital Economics said fears about the economic impact of the strike were "overdone," in part because recent shocks to the supply chain have made businesses more aware of the need to bake in precautionary measures.

The strike arrived at a politically precarious time, just one month before the election, but the tentative agreement relieves the political pressure.

National Retail Federation chief Matthew Shay called the tentative deal and the decision to end the current strike "good news for the nation's economy."

"It is critically important that the International Longshoremen's Association and United States Maritime Alliance work diligently and in good faith to reach a fair, final agreement before the extension expires," Shay said in a statement.

"The sooner they reach a deal, the better for all American families."