In a dramatic turn of events in global trade tensions, US President Donald Trump has announced a 90-day pause on most tariffs, excluding China, which will instead face a steep hike to 125%. The move comes as part of what the White House is calling a calculated economic offensive aimed at isolating Beijing, while the European Union, having revealed its own retaliatory tariffs against US goods in response to earlier American trade measures, may have to go back to the drawing board.
Donald Trump has shaken up world trade once again, announcing a 90-day freeze on most of the US’s previously announced tariffs for overseas nations, while simultaneously unleashing a punishing 125% tariff on Chinese imports. The move, hailed by the White House as a strategic power play, comes as the European Union retaliated with its own wave of excises on American goods, only to be confronted with Trump’s volte-face.
The President revealed his snap decision in a post on his Truth Social platform, saying, “I have authorised a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
But the leniency stops at China. Trump has announced that tariffs on Chinese imports were due to what he called the “lack of respect that China has shown to the world’s markets”. The tariff hike is effective immediately and has already rattled global markets, with analysts warning of further economic fragmentation.
The White House quickly moved to defend the administration’s strategy. Press Secretary Karoline Leavitt framed the move as a diplomatic win rather than a protectionist blunder.
“Many of you in the media clearly missed the ‘art of the deal’. You clearly failed to see what President Trump is doing here,” said Leavitt. “You tried to say that the rest of the world would be moved closer to China when, in fact, we’ve seen the opposite effect. The entire world is calling the United States of America, not China, because they need our markets. They need our consumers.”
After the 90-day pause announcement, Wall Street, which had been tanking, made an incredible rally. Trump had taken to social media earlier in the day, saying “This is a great time to buy!!!”, which has now led watchers, including the US House Committee on Financial Services, to question whether this wasn’t an elaborate insider trading setup.
The Committee’s X post accused as much, noting, “Hours before his 90-day tariff pause announcement. The President of the United States is literally engaging in the world’s biggest market manipulation scheme.”
EU reaction
Meanwhile, the European Union has fired back at the broader US tariff regime with its first formal wave of retaliatory tariffs. In response to the US’s 25% tariffs on European steel and aluminium, the EU will impose 25% duties on an array of American products ranging from soybeans and tobacco to orange juice and yachts. These measures, approved on 9th April just hours before the Trump backdown, are expected to impact about €21 billion worth of US exports annually if carried through.
EU officials have stated that the levies could be lifted if the US returns to the negotiating table, keeping the door open for a possible cooldown of flared tempers and frayed nerves.
“They [EU tariffs] can be suspended at any time should the US agree to a fair and balanced negotiated outcome,” noted the European Commission’s trade spokesperson, Olof Gill, on X.
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The bloc’s opening salvo follows weeks of behind-the-scenes negotiations among EU member states, the European Commission and industry leaders. Some last-minute changes were made to the retaliation list to avoid provoking further US countermeasures. For example, France, Ireland and Italy succeeded in lobbying to exclude Bourbon whiskey after Trump threatened a stiff 200% duty charge on European alcohol.
Notably, Hungary was the only EU member state to vote against the measure. The full list of targeted US goods has not been released but is currently scheduled to take effect gradually between 15th April and 1st December, allowing time for potential de-escalation after Trump’s latest bombshell announcement.
With uncertainty over what the latest terms are, concern over how long Trump’s mood swing will last and China facing unprecedented tariffs, global trade relations are entering a precarious new phase. Whether this is the beginning of renewed negotiations or a deepening of economic hostilities remains to be seen.
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Photo source: Donald J. Trump, Facebook