We have heard it said that pause is pregnant because it creates infinite possibilities. So, on Wednesday, when US President Donald Trump announced a 90-day pause on his reciprocal tariffs, nations waited in anticipation. Will Trump, the sheriff of tariff, relax the duties? In a sagely manner, Trump advised nations not to react. And if they do, Trump cautioned, he would double the tariffs.
“I did a 90-day pause for the people who didn’t retaliate because I told them if they retaliate, we’re going to double it,” Trump explained.
But he wasn’t going to be generous on China. The US President declared an immediate increase in tariffs on China, hiking it to 125% from the previously set 104%.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable,” Trump asserted.
Not the one to back down, China retaliated and how. It imposed additional tariffs of 84% on all American exports, a significant increase from the previous 34%. China vowed to fight until the end. To further heighten tensions between the world’s two largest economies, Beijing imposed export restrictions on several American companies and lodged a new complaint with the World Trade Organization (WTO), warning that the US tariffs could derail global trade stability.
Prior to announcing its tariff increase, the Chinese Ministry of Commerce said, “If the US insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end.”
During this pause, a significantly lower reciprocal tariff of just 10% will be implemented.
Defending his choice to pause the tariffs, Trump described it as a sign of flexibility. “You have to have flexibility. I could say, ‘Here’s a wall, and I’m going to go through that wall. I’m going to go through it, no matter what. Keep going, and you can’t go through the wall.’ Sometimes you have to be able to go under the wall, around the wall or over the wall,” he remarked.
Trump noted that over 75 countries had refrained from retaliating against the United States, which prompted him to authorise a 90-day pause on the reciprocal tariffs. He introduced these tariffs as a part of his effort to tackle the alleged trade imbalance with the US.
“..based on the fact that more than 75 countries have called representatives of the United States… to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non-Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorised a 90 day PAUSE,” he said on TruthSocial.
Meanwhile, major Wall Street indexes soared, even though the specific details regarding Trump’s plans to ease tariffs on non-China trading partners weren’t clear. The S&P 500 index climbed nearly 7% after the news broke.
Trump’s actions seem aimed at narrowing what had been a widespread trade war against the US down to a more focused conflict with China.
Additionally, the President’s tariff pause coincided with a retaliatory threat from the European Union. Alongside China and Canada, the 27-member bloc declared that it would initiate its first countermeasures against Trump’s tariffs next week, imposing 25% duties on a range of American imports.
