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 initia♐l 90-day period. The U.S. levy on Chinese imports will be reduced to 30% from 145% by Wednesday, whil🔜e 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%.