The agreement between China and the U.S. to cut tariffs and moderate their trade war is a welcome development, as it suggests the worst outcome facing the U.S. economy — a devastating recession — may be averted.

While the White House backed off from its steepest levies on Chinese goods, economists say it’s still too early to declare the US economy is out of danger altogether. Recession risks remain, even if the odds of a downturn have been dialed back a notch.

Donald Trump said he would raise tariffs on China if the two countries failed to reach a trade deal in 90 days, but would stop short of ratcheting them back up to 145 per cent. Trump increased the additional tariffs he was applying to all Chinese imports to 145 per cent last month,