Trump Pauses Tariff for 90 Days for Most Nations, Excludes China
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Summary: Trump pauses tariffs for 90 days for several countries except China, which faces an immediate increase to 125%.
A dramatic change in the US trade tariff policy, after the announcement of a 90-day postponement of tariffs on all countries except China. A 10% reciprocal tariff is imposed for the duration of the suspension as a result of this decision. However, taxes on Chinese imports have increased from 104% to 125% due to apparent disrespect for global markets.
The reason for this is that Republican peers and business leaders appealed to him, expressing concerns about the potential for global market instability and recession risks resulting from increased trade tensions. Treasury Secretary Scott Bessant highlighted apprehensions regarding the bond market, influencing Trump's decision. The President acknowledged observing unease in the bond market, stating, "The bond market is very tricky, I was watching it."
Despite the temporary relief for most nations, China's elevated tariffs have intensified the trade conflict between the two largest economies. China responded by raising duties on American imports to 84%. This continuous tit-for-tat escalation raises concerns over prolonged economic tensions and their effects on the world.
The immediate market response to the tariff pause was positive, with U.S. stocks experiencing significant gains. Investor confidence reflected in the S&P 500's 6% rise shortly after the announcement. However, due to the ongoing trade disputes with China, many are worried about the long-term economic outcome.
For a couple of months, many will be observing the government's attitude to trade talks and the likelihood of reaching only agreements with international partners. The outcomes of these discussions could have a lasting impact on the dynamics of global trade and financial stability.
