United States: In a surprising move, U.S. President Donald Trump declared a 90-day halt on tariffs for all countries except China. This decision marks a significant shift from his earlier stance on trade imbalances and tariffs, which had triggered concerns of a global economic slowdown.
Trump’s tariffs were originally introduced to address what he considered a trade imbalance with various countries. He mentioned that over 75 nations had negotiated with the U.S. and refrained from retaliating, leading him to opt for a temporary pause. During this 90-day period, a significantly reduced reciprocal tariff rate of just 10% will apply.
However, China remains the exception. Trump announced an immediate tariff hike on Chinese imports, raising the rate from 104% to 125%. He stated his frustration with China’s trade practices, adding, “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S. and other countries are no longer sustainable or acceptable.”
Trump also commented on the ongoing trade talks with China, suggesting that Chinese President Xi Jinping, despite his pride, would eventually find a way to negotiate a deal.
Trump’s abrupt decision to pause tariffs came amid growing concerns from business leaders and Republican allies. There was a growing fear of a potential trade war, which could push the global economy into recession. Despite initial resistance to halting the tariffs, pressure from within the U.S. Treasury Department and a selloff in the U.S. bond market prompted Trump to reconsider.
According to CNN, U.S. Treasury Secretary Scott Bessent raised alarms regarding the bond market’s instability, which eventually led to Trump’s change in stance. Trump’s own comments after the announcement indicated the decision was somewhat spontaneous. “I was watching the bond market…It was written from the heart, and I think it was well-written,” he explained.
The announcement had an immediate impact on the U.S. stock market. Wall Street saw a massive rally, with the Dow Jones surging by approximately 2,500 points, marking a nearly 8% gain. The tech-heavy Nasdaq jumped by 12.2%, its best day in 24 years, and the S&P 500 rose 6%. Oil prices also saw a rise of over 4%, while the U.S. dollar strengthened.
For India, Trump’s tariffs have had a significant effect. The 26% reciprocal tariff on Indian imports led to a dip in Indian stock markets. However, with the new 90-day pause, Indian markets are expected to experience some relief, allowing New Delhi more time to work on a trade deal with the U.S.
Indian Ministry of External Affairs Spokesperson Randhir Jaiswal commented on the ongoing trade negotiations, emphasizing that both countries are working towards a mutually beneficial multi-sectoral trade agreement. “India and the United States are very strong partners when it comes to trade relations, and we hope to conclude the agreement expeditiously,” Jaiswal added.
This pause has provided both India and other nations involved in tariff disputes with the U.S. a chance to negotiate further, potentially leading to a more balanced trade framework.
As the 90-day pause unfolds, the global economic landscape could shift, especially if the tariff pause becomes a precursor to more permanent changes in U.S. trade policy.
