China’s surprise deal with the US triggers positive growth outlook from investment banks

The US and China have agreed to a temporary 90-day tariff reduction, cutting duties significantly. UBS has raised China’s GDP growth outlook to 3.7-4.0% from 3.4%. This shift indicates a potential thaw in trade tensions, encouraging positive sentiment in Asian markets.

Following the tariff announcement, investment banks like Morgan Stanley predicted faster growth, with China’s GDP possibly reaching 4.2% in 2025. Equities surged, with major Asian indexes, including Japan’s Nikkei, seeing notable gains, bolstering investor trust.