US, China trade truce 'welcome' news for Australia: Chalmers

The United States and China have agreed to a temporary easing of trade tensions for a 90-day period.

The move will see US tariffs on Chinese imports drop from 145% to 30%, while China will cut duties on American goods from 125% to 10%.

While welcome news for investors, Treasurer Jim Chalmers said he is not "getting carried away" by the announcement.

"It is significant. It's welcome. It's encouraging. But we need to temper our expectations here. There's still a lot of unresolved issues. There's a lot of uncertainty, unpredictability, volatility in the global economy," Chalmers said.

"Australia's got a lot to lose from a trade war between the US and China in particular, and so we want to see these trade tensions de-escalated permanently, not temporarily."

Chalmers said the government is continuing to analyse, monitor and engage with its counterparts to ensure Australia is well-positioned to shield itself from any potential fallout.

"Our treasury modeling makes it really clear that there are a number of ways that these trade tensions impact us, but the biggest way is the impact on global demand that comes from a dramatically weaker Chinese economy, and that's one of the reasons why a trade war between the US and China is obviously not in Australia's interests," he said.

"I think it's worth reminding Australians that Australia is really well placed and really well prepared to deal with the fallout from this, but we do have a lot of skin in the game."

Meanwhile, deVere chief executive Nigel Green said the markets will likely be buoyed by the news.

"Markets move fast-and they're going to be racing ahead of previous assumptions," Green said.

"This truce opens the door to renewed trade flows, softer inflation pressures, and stronger company earnings, especially in sectors that were bearing the brunt of the tariff war."