US Tariffs on Hold: Trump Authorizes 90-Day Pause, Reduces Rates for over 75 Countries
President Donald Trump has announced a surprise 90-day pause on reciprocal tariffs for most countries, excluding China, effective immediately. This move marks a significant shift from his previous stance on maintaining high tariffs. Over 75 countries will benefit from the pause, with tariff rates dropping to a universal 10%. However, China will face increased tariffs, rising to 125% from 104%, due to its recent retaliatory measures. Mexico and Canada are exempt from the 10% tariffs, but most goods from these countries will remain tariffed at 25% unless they comply with the US-Mexico-Canada Agreement (USMCA).
President Donald Trump has announced a surprise 90-day pause on reciprocal tariffs for most countries, which took effect at midnight, excluding China. This move marks a significant shift from his stance on maintaining high tariffs.
A three-month suspension of reciprocal tariffs will be in effect for over 75 countries, with rates dropping to a universal 10%. China, the world’s second-largest economy, will not be included in the pause. Instead, due to China’s recent retaliatory measures, tariffs on Chinese goods will increase to 125% from 104%.
This decision may ease trade tensions and influence global economic dynamics. The move has already seen a positive market response, with the Nasdaq surging 8% following the announcement.
Trump’s Tariff Announcement
Speaking to reporters, Trump expressed optimism about reaching a deal with China, saying the two countries want to make a deal but are unsure how to proceed.
According to a White House official, Mexico and Canada won’t face the 10% tariffs. However, most goods from these countries will remain tariffed at 25% unless they comply with the US- Mexico- Canada Agreement (USMCA). Sector-specific tariffs imposed by Trump will still apply.
The stock market surged significantly after President Trump announced that specific trade measures should be paused. Dow Jones jumped nearly 3,000 points, marking a 7.87% increase, its best day in five years. The S&P 500, on the other hand, rose 9.5%, its best day since October 2008.
Trump’s decision to pause tariffs for most countries eased fears of escalating trade tensions. However, the 10% universal tariff on imports remains in effect.
President Trump’s message to other countries is clear: “refrain from retaliating, and you’ll be rewarded.” This move showcases his commitment to trade and willingness to negotiate in good faith. Commerce Secretary Howard Lutnick and advisor Scott Bessent were present when Trump posted his message on Truth Social, with Lutnick calling it one of Trump’s most extraordinary posts.
United States Versus China: Trade War
The US-China trade war is escalating, with the Trump administration ramping up pressure on China. Scott Bessent, a Trump advisor, believes China’s economy will suffer more from the trade tensions than the US’s.
The US raised tariffs on Chinese imports to 54%, with additional duties on steel, aluminum, and automobiles. At the same time, China retaliated with tariffs on US agricultural products, such as soybeans, corn, and pork, and has sued the US under the WTO’s dispute settlement mechanism.
