S&P says US-China tariff truce eases macroeconomic pressure

S&P says easing tariff tensions between the US and China has improved macroeconomic conditions by lowering uncertainty, boosting markets, and reducing risks, though global trade challenges still weigh on credit conditions.

Standard & Poor's (S&P) has stated that the recent de-escalation in US-China tariff tensions has temporarily improved the global macroeconomic outlook. The international credit rating agency noted that lower bilateral tariffs between the world’s two largest economies, reduced policy uncertainty, and a more upbeat market environment are contributing to this relief.

“The tariff climbdown improves our macroeconomic outlook,” S&P said in a statement, highlighting the positive impact on asset prices and partial reopening of markets.

Despite this temporary improvement, S&P warned that the broader global trade environment remains a source of pressure on financial conditions and credit ratings. "Tail risks have eased, but trade dynamics still affect sectors and countries unevenly,” the agency added.

The positive development followed a rare joint statement by the US and China after trade negotiations in Geneva. Both countries agreed to reduce tariffs for a 90-day period: the US cutting its rate on Chinese goods from 145% to 30%, and China reducing its rate from 125% to 10%.

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