President Donald Trump announced a 90-day pause on most reciprocal tariffs, a significant policy shift from his previous stance. This decision, however, excluded China, where tariffs were increased to 125%. The pause on other tariffs brought relief to Wall Street, leading to substantial stock market gains.
The move caused a sharp rally in US stock markets, with the Dow Jones experiencing its best day in five years. However, economists remain cautious, with some still predicting a recession. While the pause was welcomed by some businesses, many expressed concern over the uncertainty caused by remaining tariffs and the possibility of future increases.
Mexico and Canada, unlike other countries, are largely unaffected by the change; tariffs remain at 25% unless the USMCA is met. China reacted negatively to Trump's increased tariffs, asserting that it is a violation of their rights and interests. The Chinese government reiterated its commitment to resisting further tariff escalation.
Trump's administration expressed contrasting viewpoints on the tariff pause. Treasury Secretary Scott Bessent suggested it was a strategic move, while US Trade Representative Jamieson Greer claimed to have been unaware of it until after the announcement. The pause leaves many unanswered questions, with the uncertainty of future trade relations still a key concern. Trump has indicated that he will remain personally involved in ongoing trade negotiations.