In a surprising move, President Donald Trump declared a 90-day halt on tariffs for all countries, with the exception of China, for which he imposed an immediate tariff increase to 125%. This shift in policy comes after intense lobbying from business leaders and fellow Republicans, who had urged the president to reconsider the tariffs amid fears of a global economic downturn.
The 90-day tariff pause applies to over 75 countries that have negotiated with the United States, reducing reciprocal tariffs to just 10%. Trump explained that these countries had not retaliated against the US, which prompted the decision to ease tariffs temporarily. The tariff respite is seen as an unexpected turn of events, especially considering the president's firm stance on trade imbalances in recent months.
However, the situation with China remains tense. Trump sharply criticized China for its trade practices and announced an increase in tariffs on Chinese goods to 125%, up from the previously planned 104%. In a post on Truth Social, Trump stated that China’s lack of respect for global markets was the reason for the new hike, and he expressed hope that China would soon recognize the unsustainable nature of its trade actions.
“China wants to make a deal. They just don’t know how to go about it... President Xi Jinping is a proud man. They don’t know quite how to go about it, but they’ll figure it out,” Trump said.
While Republicans and business executives had warned of a potential trade war and global recession, Trump remained steadfast in his approach, claiming, “My policies will never change.” However, internal concerns about the US Treasury market and a possible bond market crisis eventually led to the decision to pause the broader tariff measures.
Treasury Secretary Scott Bessent and White House economic officials had raised alarms about a selloff in the Treasury market, influencing Trump to reassess his tariff strategy. During a press briefing, Trump revealed that his decision was prompted by a gut feeling rather than a carefully planned strategy.
“The bond market is very tricky; I was watching it. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy,” Trump remarked. "It was written from the heart, and I think it was well written too, but it was written from the heart.”
This unexpected tariff pause marks a critical shift in US trade policy, at least temporarily, as the global community watches closely for further developments.
(This story is published from a syndicated feed)