Trump’s Tariff Twist: A 90-Day Pause for Most, A 125% Hike for China.
On April 9, 2025, President Donald Trump sent shockwaves through global markets with a dramatic policy pivot, announcing a 90-day pause on new “reciprocal” tariffs for most countries while simultaneously ramping up tariffs on China to a staggering 125%. Unveiled via a Truth Social post at midday, this decision—effective immediately—marks a significant shift from the aggressive trade stance Trump introduced just a week prior on April 2. That initial plan imposed a 10% baseline tariff on all imports and steeper reciprocal tariffs on around 60 nations, sparking a worldwide market plunge that erased trillions in stock value. Today’s announcement, which keeps the 10% universal tariff in place but delays higher rates for 90 days (except for China), reflects a strategic recalibration amid intense pressure from allies, markets, and even some of Trump’s billionaire backers.
The tariff pause comes after more than 75 countries reportedly contacted U.S. officials—spanning the Departments of Commerce, Treasury, and the U.S. Trade Representative—to negotiate solutions to trade disputes, including tariffs, currency manipulation, and trade barriers. Trump highlighted this outreach as a key motivator, noting these nations refrained from retaliation at his “strong suggestion.” Treasury Secretary Scott Bessent framed the move as a deliberate tactic, insisting it was “Trump’s strategy all along” to lure countries to the bargaining table. During this 90-day window, the administration plans “bespoke” negotiations, with Trump personally involved, aiming to reshape global trade dynamics. Meanwhile, existing tariffs on steel, aluminum, and autos remain untouched, ensuring some continuity in Trump’s “America First” agenda.
China, however, faces a starkly different fate. Trump justified the 125% tariff hike, up from 104%, as a response to Beijing’s “lack of respect” for global markets, pointing to China’s retaliatory 84% tariffs on U.S. goods announced earlier today. This escalation intensifies an already heated U.S.-China trade war, shifting the global trade conflict’s epicenter eastward. The White House clarified that Canada and Mexico dodge the 10% baseline tariff under the USMCA framework, though non-compliant goods face a 25% rate, with energy and potash at 10%. The European Union, despite planning retaliatory tariffs (set for next week), benefits from the pause, with its goods taxed at the 10% baseline for now. This selective approach underscores Trump’s intent to isolate China while buying time with other partners.
Markets reacted with a euphoric surge. The Dow Jones Industrial Average soared nearly 3,000 points (7.87%), the S&P 500 leapt 9.5%, and the Nasdaq rocketed 12.2%—its best day since January 2001. This rally erased days of losses triggered by the original tariff rollout, which had pushed the Cboe Volatility Index to crisis levels not seen since the COVID-19 pandemic. Trump acknowledged the market’s “yippy” behavior as a factor, telling reporters, “They were getting a little bit afraid,” and touting the rebound as “beautiful.” Critics, however, see inconsistency: just hours before, Trump had urged Americans to “BE COOL” amid the chaos, while aides like Press Secretary Karoline Leavitt had insisted he’d never waver. The abrupt shift left U.S. Trade Representative Jamieson Greer blindsided during a House hearing, admitting he learned of the pause in real time.
The economic stakes are high. Trump’s initial tariff blitz—branded “Liberation Day”—aimed to reverse decades of trade deficits, which hit $1.2 trillion in 2024, and re-shore manufacturing. Economists warned it risked a recession, with Goldman Sachs pegging a 45% chance even after the pause. Business leaders like JPMorgan’s Jamie Dimon predict slower growth, sticky inflation, and potential defaults, while billionaire Trump supporter Bill Ackman had urged a 90-day timeout to avoid an “economic nuclear winter.” The pause offers breathing room, but the 10% baseline tariff and China’s 125% rate keep uncertainty alive. Consumers may face higher prices, particularly for Chinese goods, while industries reliant on global supply chains—like tech and retail—brace for disruption.
Politically, the move reveals Trump’s flexibility under pressure. Allies like Senators Ted Cruz and Eric Schmitt praised his “great leadership,” while Democrats, including Rep. Steven Horsford, slammed it as “amateur hour.” California Governor Gavin Newsom quipped that Trump “caved” and “will change his mind again,” urging global partners to stick with his state. The pause also complicates Trump’s broader agenda, including a stalled TikTok deal with ByteDance, which he tied to China’s tariff response. Looking ahead, the 90-day window could redefine U.S. trade relations—or unravel if negotiations falter. Trump hinted at optimism, suggesting Chinese President Xi Jinping might call to deal, though he offered no specifics on what Beijing must concede.
This tariff saga underscores Trump’s high-stakes gamble: wielding trade policy as both weapon and olive branch. For now, the world watches as markets stabilize, negotiators scramble, and China digs in. The pause buys time, but with Trump’s penchant for unpredictability—evident in his claim the policy “came from the heart” after a morning huddle with Bessent and Commerce Secretary Howard Lutnick—the next 90 days promise more twists. Whether this softens into a trade reset or hardens into a prolonged standoff, Trump’s tariff legacy is still being written, with global economies hanging in the balance.
