A sudden pause on most tariffs imposed by the US has sent shockwaves through markets, as President Trump cited over 75 countries calling for negotiations to resolve trade issues. The pause gives the White House three months to engage in talks with individual countries.
In a sudden turn of events, President Trump announced a pause on most of the tariffs he had imposed earlier, citing that ‘more than 75 countries have called Representatives of the United States … to negotiate a solution‘ to trade issues. This decision has sent shockwaves through markets and businesses worldwide.
The country-specific tariffs that took effect last week are now on hold for 90 days. These tariffs were imposed on dozens of U.S. trading partners, including China, Mexico, Canada, and the European Union. The pause gives the White House three months to engage in negotiations with individual countries.
While Wall Street initially breathed a sigh of relief at the news, markets began to fall again on Thursday, indicating continued uncertainty. The Dow Jones Industrial Average surged close to 8% on Wednesday but fell back on Thursday, while the S&P 500 rose more than 9% and the Nasdaq rallied over 12% before also declining.
Baseline tariffs of 10% remain in place on imports from all countries, meaning prices will still be higher than they were a few months ago. Canada and Mexico are exempt from these tariffs, but many goods from those countries are still subject to tariffs.
Despite the pause on most tariffs, the trade war between China and the U.S. appears to be escalating. China has increased its retaliatory tariffs against the U.S., bringing the total rate to 84%. The Chinese Film Administration also announced that it would cut the number of U.S. movies shown in the country.
The China-US trade relationship is a complex and multifaceted issue, with both countries being major trading partners.
In 2020, the US was China's largest export market, while China was the US's largest supplier of imports.
The two countries have a significant trade deficit, with the US importing more goods from China than it exports to China.
The trade relationship has been marked by tensions and disputes over issues such as intellectual property theft, technology transfer, and currency manipulation.
The Trump administration says it is time to focus on making individual deals with countries that did not retaliate. Treasury Secretary Scott Bessent said that each negotiation will be a separate, bespoke conversation, and that President Trump wants to be personally involved. The White House has also announced plans to negotiate with Japan.
The mixed messaging around tariffs has raised scrutiny on Trump’s aides. While officials have not elaborated on specifics, leaders from dozens of countries in Asia, Europe, and elsewhere have referenced conversations about negotiations publicly.
