A deal with China is a relief to investors who worried 145% tariffs would severely limit trade, raise prices and hurt the US economy.

“It is good that that de-escalation in happening amidst countries. Trade flourishes when value chains are free,” said an official source, adding that India has to improve its competitiveness. He also noted that tariffs are still quite high on China.

The U.S. agreed to cut tariffs on Chinese goods from 145% to 30%, while China committed to reduce tariffs on U.S. products from 125% to 10%. The lowered tariffs will remain in place for 90 days while the two sides negotiate a wider trade deal.

The White House announced a "China trade deal" in a May 11 statement, but did not disclose details. The apparent agreement came together sooner than most observers expected after Trump's 145% tariffs on Chinese imports virtually halted $600 billion in annual trade between the world's two largest economies.

Online shoppers in the U.S. will see a price break on their purchases valued at less than $800 and shipped from China after the Trump administration reached a truce with Beijing over sky-high tariffs.

Prices will plunge if the United States and China fail to resolve their trade dispute limiting U.S. soybeans from their largest market, agribusiness consultancy AgResource said.

Former Fed president Bill Dudley warned that the central bank risks mistiming interest rate cuts if the economy stumbles into a recession.

China’s surprisingly quick agreement with the US to wind back punitive tariff rates put a spotlight on a Chinese negotiating team that features decades worth of technical trade experience alongside a top aide of President Xi Jinping.