Analysis: U.S. Tariff Deal Lifts China’s Short-Term Outlook

GDP growth and exports are likely to exceed expectations, but finding a durable solution to U.S.-China tensions will be challenging

In a major step toward easing China-U.S. trade tensions, senior officials from Beijing and Washington jointly announced Monday that most of the additional tariffs they had imposed on each other would be suspended for 90 days or removed, while negotiations continue to resolve a string of economic and trade issues between the two countries.

As part of the truce agreement reached following two days of high-level trade talks in Geneva, the U.S. will reduce the 145% additional tariffs on all Chinese goods to 30%, while China will cut its retaliatory levies against the U.S. from 125% to 10%. The tariff reductions, some of which are temporary, are due to take effect by Wednesday.

The two sides will establish a mechanism to continue discussions and may conduct working-level consultations on economic and trade issues, according to the joint statement.

Global markets welcomed the agreement. The benchmark CSI 300 Index, which tracks the top 300 companies traded in Shanghai and Shenzhen, rose 1.2% on Monday. In Hong Kong,