In a significant shift in US trade policy, President Donald Trump has declared a 90-day suspension of elevated tariffs on most countries, while concurrently intensifying tariffs on Chinese imports to 125 percent.
This move comes amid global economic uncertainty and mounting pressure from international allies, domestic lawmakers, and financial markets.
Global tariff pause amid market turmoil
On April 9, President Trump announced the temporary pause on the newly implemented “reciprocal tariffs”, which had taken effect just a day earlier. The decision was influenced by widespread concerns over potential economic repercussions.
Despite the pause, a 10 percent baseline tariff remains in place for most imports, and existing 25 percent duties on steel, aluminum, and automobiles continue.
The administration has indicated that countries refraining from retaliatory measures may be rewarded with more favorable trade terms in the future.
China faces heightened tariffs
Contrasting the relief extended to other nations, China has been subjected to increased tariffs, now reaching 125 percent on its exports to the US.
This escalation is a response to China’s recent imposition of an 84 percent tariff on American goods.
Market reactions and political responses
The announcement led to a significant rebound in US stock markets. The S&P 500 surged by 9.5 percent, marking its largest single-day gain since 2008, while the Nasdaq and Dow Jones also experienced substantial increases.
Senate Republicans expressed relief over the pause, with some lawmakers having previously voiced concerns about the potential economic impact of the tariffs.
Exemptions for tech products
In an effort to mitigate the impact on consumers and the technology sector, the administration has exempted certain electronics, including smartphones, laptops, and semiconductor equipment, from the heightened tariffs.
This exemption benefits major tech companies reliant on Chinese manufacturing.
Looking ahead
While the 90-day pause provides temporary relief, uncertainty remains regarding the administration’s long-term trade strategy.
The potential for future tariff adjustments continues to pose challenges for global economic stability.
