U.S. and Chinese officials surprised markets by agreeing to a 90-day suspension of most reciprocal tariffs. Announced May 12, the deal rolls back U.S. tariffs on Chinese imports from 145% to 30%, while China dropped its duties on U.S. goods from 125% to 10%. Investors broadly welcomed the de-escalation.
Goldman Sachs now pegs the odds of a U.S. recession at 35%, down from 45%, and has revised its GDP growth forecast for 2025 up to 1%. However, this relief may be only temporary. The tariff suspension expires around August, and the pressure is on for the U.S. and China to reach a more meaningful deal. Business leaders remain cautious, as consumer confidence is stuck at a 13-year low, and any breakdown in talks could quickly reverse market gains.
