- Trump paused tariffs on most countries for 90 days but hiked China’s rate to 125% amid ongoing trade tensions.
- Markets surged after the announcement, though economists warn recession risks remain due to lingering uncertainties.
- Trump’s move was framed as strategic leverage, but some critics say it was a response to mounting economic pressure.
In a surprise move on Wednesday, President Donald Trump hit pause on his sweeping tariffs against most countries — at least for 90 days — but doubled down on China, raising tariffs on its imports to a whopping 125%.
Markets reacted instantly. The S&P 500 shot up nearly 7%, though questions still linger about the details. What’s actually changing? That’s still a bit murky.
The Pause That (Sort of) Calmed the Markets
Trump posted on Truth Social: “More than 75 Countries have reached out to talk. I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
That 10% baseline rate still represents a hike over previous tariffs for most countries, but it’s less aggressive than the 20–25% duties he slapped on the EU, Japan, and South Korea.
The announcement came as global backlash to the new tariffs reached a boiling point, with stock markets flailing and investors growing increasingly uneasy.
A Strategic Retreat — or a Reaction to Pressure?
White House press secretary Karoline Leavitt said the president’s decision was a “strategic” one. According to her, the media misunderstood the move. “You said the world would rally behind China, but instead, they’re all calling us,” she claimed.
Still, analysts say the writing was on the wall.
TD Securities’ Gennadiy Goldberg noted before the pause that the markets were desperate for some kind of de-escalation. “Absent any pullback, stabilization just isn’t happening,” he said.
Recession Warnings and Bond Market Wobbles
Investor confidence had taken a hit, not just in stocks but in bonds too. Yields on the 10-year U.S. Treasury note had jumped to 4.45% — a red flag for those watching inflation and economic sentiment.
Oxford Economics’ John Canavan wasn’t surprised by the pivot. “Mixed messages have been flying for days,” he said. “At some point, Trump probably realized that putting everything on pause was the safest play.”
Still a Mess Under the Hood
Despite the pause, key tariffs remain. The 25% duties on steel, aluminum, and autos are still in place. And Trump has hinted more could be coming — including taxes on imported prescription drugs.
Delta Airlines CEO Ed Bastian criticized the chaos, saying businesses can’t plan when policy shifts like this. “We were set for a record year,” he said, “and now? We’ve had to reset expectations entirely.”
Economists See Signs of Trouble
Analysts like Joe Brusuelas from RSM say all this may already be pushing the U.S. into recession territory. “We’re looking at shocks from every angle — consumer spending, trade, labor, prices — and all signs point to a downturn this quarter,” he warned.
Still, Treasury Secretary Scott Bessent struck a more optimistic tone. “The economy’ll be back on all cylinders soon,” he told Fox Business. He said many nations — Japan, South Korea, India — were ready to deal. Even Vietnam was on its way to Washington.
So What Now?
No one really knows. The 10% tariffs? Still here. China? Now hit even harder. The drug import tax? Coming soon, apparently.
One thing’s clear though: Trump’s tariffs are no longer just an economic policy — they’ve become a global negotiation tool. Whether that leads to better deals or deeper divides… that’s still unfolding.
