Trump Announces 90-day ‘pause’ on Reciprocal Tariffs, But China Feels the Heat

In a surprising move on April 9, 2025, President Donald Trump announced a 90-day “pause” on reciprocal tariffs, signaling a temporary de-escalation in global trade tensions. This decision affects all countries except China and is expected to provide a window for negotiations aimed at resolving trade disputes.

Key Facts About the Tariff Pause

• Scope of the Pause: The tariff pause applies to reciprocal tariffs for over 75 countries that expressed willingness to negotiate trade terms with the U.S. without retaliation. Tariffs for these nations were lowered to 10%, effective immediately.

• Exemption for China: China remains excluded from this pause. Tariffs on Chinese goods were increased from 104% to 125%, reflecting Trump’s continued tough stance against Beijing.

• Market Reaction: Stock markets responded positively to the announcement, with significant gains attributed to the easing of trade tensions. Dow Jones soars 2,470 points, Nasdaq up 10%
  

Trump’s Statements and Rationale

“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 realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, 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 authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”

President Trump justified the pause as an opportunity for countries to align their trade policies with U.S. economic and national security priorities. He emphasized that the U.S. would continue to protect its interests while offering a cooperative approach to nations willing to negotiate. However, he criticized China for “long-term trading abuses” and announced additional measures targeting Chinese imports.

Background on Recent Tariff Policies

Here’s a background on recent tariff policies under President Trump in chronological order:

• January 20, 2025: Trump signed the “America First Trade Policy Presidential Memorandum,” directing his administration to investigate causes of the U.S. trade deficit and identify unfair trade practices by other countries.

• February 1, 2025: Trump announced a 25% tariff on imports from Canada, citing concerns over fentanyl trafficking and illegal immigration. Mexico also faced a similar tariff, though it was limited to 10% on Canadian energy.

• February 13, 2025: Trump signed a Presidential Memorandum titled “Reciprocal Trade and Tariffs,” further reviewing non-reciprocal trade practices by U.S. trading partners.

• March 1, 2025: Trump signed an executive order considering tariffs on imported lumber and timber to protect national security, as these materials are crucial for the U.S. construction industry and military.

• March 4, 2025: Trump doubled tariffs on all Chinese imports to 20% and imposed a 34% tariff on Chinese goods. He also increased tariffs on other countries, including a 20% tariff on the European Union, 26% on India, and 25% on South Korea.

• April 1, 2025: Trump received the final results of investigations into unfair trade practices and began planning tariff actions based on those findings.

• April 2, 2025: Trump declared a national emergency to address the U.S. trade deficit, invoking the International Emergency Economic Powers Act (IEEPA) to impose a 10% tariff on all imports, effective April 5, 2025. Higher tariffs were set for countries with significant trade deficits, effective April 9, 2025.

• April 5, 2025: The 10% tariff on all imports took effect.

• April 9, 2025: Trump announced a 90-day pause on reciprocal tariffs for over 75 countries willing to negotiate, lowering tariffs to 10% for these nations. However, tariffs on Chinese goods were increased to 125%

China-U.S. Trade Escalation

Here’s a summary of the China-U.S. Trade Escalation, considering recent updates:

• U.S. “Reciprocal Tariffs”: In April 2025, the U.S. implemented a “reciprocal tariff” policy, initially imposing a 34% tariff on all Chinese imports.
• Initial U.S. Total: This new tariff, combined with existing ones, brought the total U.S. tariff on Chinese goods to 54%.
• China’s Initial Retaliation: China responded immediately by announcing a 34% tariff on all U.S. goods.
• Further U.S. Tariff Hikes on China: The U.S. subsequently increased tariffs on Chinese goods to 104% and then to 125%.
• China’s Increased Retaliation: In response to the further U.S. increases, China raised its tariffs on U.S. goods to 84%, effective April 10, 2025.

Non-Tariff Measures by China:

China has employed non-tariff measures, including:

• Export controls on rare earth minerals.
• Adding U.S. companies to export control and “unreliable entity” lists.
• Initiating anti-dumping investigations.

WTO Challenge: China has formally challenged the U.S. tariff actions at the World Trade Organization.

China’s Stance: China has condemned the U.S. actions as “economic bullying” and vowed to protect its interests.

Exclusion from U.S. Tariff Pause: While the U.S. announced a 90-day pause on further tariff increases, this explicitly excludes China, indicating continued tension.

Implications of the Tariff Pause

The temporary relief could ease supply chain pressures and allow businesses time to adapt. However, uncertainty remains regarding long-term trade policies:

• Countries benefiting from the pause may seek new agreements with the U.S.

• The continued exclusion of China could exacerbate global trade fragmentation.

• Businesses must prepare for potential reinstatement or adjustments after the pause ends.

This strategic shift reflects Trump’s balancing act between enforcing protectionist policies and fostering diplomatic negotiations with key trading partners. As talks unfold, global markets and policymakers will closely watch how this move reshapes international trade dynamics.

Worthview