President Trump has decided to pause his tariffs on most nations for a period of 90 days in response to global market turmoil. However, he has hiked up the tax rate on Chinese imports to 125%, signaling a potential trade showdown between the U.S. and China. The S&P 500 stock index saw a significant spike of 9.5% after the announcement.
This move comes after intense pressure from volatile financial markets pushing Trump to reconsider his tariffs. Stocks and bonds were selling off, leading to shrinking retirement savings for voters and warnings of increased prices for businesses. Trump cited the fears and stock market declines as reasons for the tariff pause, despite some administration officials insisting it was always part of the plan.
The pause means that countries subject to the tariff will see a lower rate of 10% during this period, as opposed to the previous rates. Treasury Secretary Scott Bessent mentioned that negotiations with individual countries would involve bespoke deals over the next 90 days in an effort to reach agreements.
Business executives had warned of a potential recession due to Trump’s policies, and the stock market had been shaky following days of decline. Critics pointed out the mixed messages from the administration regarding negotiations and escalating trade tensions.
Despite the uncertainty, Bessent expressed optimism that the economy would rebound in the near future, with countries seeking negotiations rather than retaliating. The focus now shifts to country-by-country talks to resolve tariff issues as the global economy reacts to the ongoing trade war.
