US-China Tariff Truce Lifts Markets, Uncertainty Remains

The United States and China have agreed to a temporary 90-day reduction in tariffs, with US tariffs on Chinese goods dropping from 145% to 30% and Chinese tariffs on US goods falling from 125% to 10%. The truce has sparked initial optimism in global financial markets and provided a short-term boost to export-oriented economies such as Malaysia. However, experts warn that the agreement is only a pause in the trade conflict, with unresolved issues and the risk of renewed tensions. Market enthusiasm faded as investors realized the remaining tariffs are still historically high and a full return to pre-trade war conditions is unlikely. Economists estimate the new tariffs will reduce China’s GDP growth by about 0.6 percentage points over the next year. US allies like Japan and Australia are closely watching the situation as ongoing trade tensions continue to influence global supply chains and trade policies.