Goldman Sachs raised its forecast for Chinese and U.S. economic growth, and cut its odds for a U.S. recession, after the countries agreed Monday to slash tariffs on each other's imports.

The U.S. and China agreed Monday to dramatically roll back tariffs on each other's imports for an initial 90-day period. The U.S. levy on Chinese impo♔rts will be reduced to 30% from 145% by Wedne🐭sday, while Beijing's tariffs on U.S. goods will drop to 10% from 125%.

The Wall Street bank said it expects 4.6% Chinese GDP growth this year and 3.8% in 2026, up from its previous projections of 4.0% and 3.5%, respectively. Goldman also sees "Chinese real exports to be roughly flat in 2025/26 (vs. -5% per year previously)."

As for the U.S., Goldman said the 90-day pause in retaliatory tariffs and a "meaningful easing in financial conditions over the last month" had led it to lift its fourth-quarter 2025 growth forecast to 1.0% from 0.5% and cut its 12-month recession odds to 35% from 45%.