Reasons Behind Trump’s 90-Day Tariff Suspension for All Nations Except China
Donald Trump declared a 90-day suspension of tariffs for every country, excluding China, for which he revealed an immediate rise in tariffs to 125 percent.
On Wednesday, US President Donald Trump announced a 90-day halt on his extensive tariffs affecting all countries, other than China—a decision that seemed nearly impossible only a day before. Trump explained that he had imposed these tariffs to tackle the claimed trade disparity with the US, and that over 75 nations had engaged in talks without retaliating against him, prompting this suspension. During these 90 days, he mentioned a significantly lowered reciprocal tariff of merely 10 percent would apply.
In contrast, for China, Trump specified an immediate tariff increase to 125 percent, up from the previously set 104 percent.
What prompted Trump to pause the tariffs?
For several days, other Republicans and business leaders urged the US President to halt the tariffs due to concerns about an imminent trade war, which could lead to a severe market collapse, alongside fears of a potential global recession. Nevertheless, he remained firm, stating, "My policies will never change."
While addressing reporters following the tariff pause announcement, it became evident that the choice appeared to be impulsive instead of a well-devised plan.
US Stock Market Reaction
Wall Street’s stocks soared on Wednesday after Trump’s unexpected decision to pause numerous new tariffs, boosting an equity market that had suffered from days of declines due to increasing recession fears. Almost immediately after the announcement, the Dow index jumped by approximately 2,500 points, moving towards a nearly eight percent increase for the day. The tech-heavy Nasdaq climbed by 12.2 percent, marking its best performance in 24 years, while the S&P 500 rose by 6.0 percent to reach 5,281.44 points.
Oil prices surged by over four percent, and the dollar also appreciated.
Impact on India
Since Trump implemented a 26 percent customized reciprocal tariff on imports from India, the Indian stock market has experienced a significant downturn. Nevertheless, with the 90-day pause, stocks may receive some relief, allowing New Delhi additional time to negotiate a deal with the US.
“India and the United States have a robust partnership regarding trade relations, economic relations, investment relations, and commercial relations. We hope to see these connections continue to grow and strengthen. Concerning trade matters, we are negotiating a bilateral trade agreement, and we hope to resolve these issues and finalize this specific agreement promptly,” he stated.
