90 Pause On Targeted Tariffs Announced, Except China – CoffeeTalk

Trump has announced a 90-day pause in higher targeted tariffs for most countries, a significant reversal in his trade war that has caused economic and market turmoil. The decision was made because over 75 trading partners did not retaliate and have reached out to the U.S. to discuss some of the issues he had raised. However, the pause did not apply to China, which has retaliated with 84% hikes. Instead, Trump raised duties for that country to 125%, effective immediately.

The trade war is not exactly over, and a 10% across-the-board duty will remain in place. For Canada and Mexico, goods covered by the U.S., Canada and Mexico trade agreement will continue to have no tariffs, while products that aren’t exempt under the trade deal will have a 25% tariff. Canadian energy and fertilizer products will have a 10% tariff. It was not immediately clear which countries would be covered by the pause; the White House would not say. Earlier Wednesday, the E.U. voted to impose fresh retaliatory duties, but those aren’t set to take effect until next week.

Treasury Secretary Scott Bessent later said that separate tariffs on imported autos, steel, and aluminum will remain in place, while planned tariffs on items like lumber and pharmaceuticals are still on. It is unclear what prompted Trump to change his mind, as he appeared to dig in just hours earlier, telling Americans “BE COOL” in a Truth Social post.

Markets have been in stunning turmoil, with major stock indexes losing trillions of dollars in value and alarming signals from the bond market setting Wall Street on edge. A false-at-the-time headline suggesting Trump would take a 90-day pause shot around the internet on Monday, briefly boosting markets. A growing chorus of business leaders and Trump’s allies have come out publicly against the tariffs, including Tesla CEO Elon Musk.

Goldman Sachs lowered its odds of a recession, but it is still forecasting minimal economic growth and a 45% probability of recession given the remaining tariffs in place. Borrowing costs, which had surged early Wednesday as the tariffs took effect, also eased slightly, though not substantially as some investors may fear a lingering fallout from the tariffs episode.

Trump has been advocating for tariffs as a solution to the US economic problems since his presidency, branding April 2 as “liberation day.” The global markets have reacted negatively, with $6.6 trillion lost last week. However, Trump and his allies have now doubled down on the need for tariffs to return manufacturing to the US and generate trillions of dollars in revenue.

The White House’s expectations for these policies are unclear, as the lower 10% tariff rate left in place will reduce incentives for companies to relocate production to the US and generate less revenue. Treasury secretary Bessent believes that Trump created maximum negotiating leverage for himself.

However, it is unclear how successful the US will be at negotiating new trade agreements with other countries given Trump’s repeated threats over the past few months. Previously, Trump threatened sweeping tariffs on all imports from Mexico and Canada before walking most of them back.

Economic uncertainty remains over what will happen next in the U.S. trade war with China, which exports more than $400 billion worth of goods to the U.S. each year. Under Trump’s new tariffs, the cost for U.S. companies importing goods from China has more than doubled.

U.S. companies exporting their products to China are also caught up in the fray after China increased its tariffs on American goods like agriculture products and machinery. Commerce Secretary Howard Lutnick posted to X that he sat with Trump as he posted the initial message, adding that the world is ready to work with Trump to fix global trade, and China has chosen the opposite direction.

The Trump regime will now face the daunting task of negotiating dozens of potentially complex and intricate trade deals in a three-month period.

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