Trump Announces 90-Day Pause on Tariffs for All Countries, Except China
Why? And, what next?
Important: Much of the information presented in this research article has been compiled with the assistance of artificial intelligence tools. While efforts have been made to ensure accuracy and reliability, the data and insights reflect the capabilities and limitations of these tools as of the publication date. Readers are encouraged to: Verify critical details from primary sources. Consider the publication date. Assess the reliability of AI-generated content.
Date: April 10, 2025
On April 9, 2025, U.S. President Donald Trump announced a 90-day pause on tariffs for all countries except China, marking a significant shift in international trade policy. This decision, effective immediately, reduces tariffs to a universal 10% for most nations while escalating tariffs on Chinese imports to 125%. As the latest development in global trade dynamics, this announcement has sparked widespread speculation about its motivations and implications. This research post explores the reasons behind the tariff pause, the Indian government’s potential response, reactions from global leaders on X, and current global market reactions.
1. Reasons for the 90-Day Tariff Pause (Excluding China)
Economic Motivations
The decision to pause tariffs for 90 days, except for China, likely stems from pressing economic concerns. Here are potential drivers:
Mitigating Global Inflation: Tariffs imposed earlier in April 2025 had raised fears of reigniting inflation. A pause could ease price pressures on imported goods, stabilizing consumer costs.
Supply Chain Stability: Industries like technology and retail, reliant on global supply chains, faced disruptions from reciprocal tariffs. Reducing tariffs to 10% may prevent further strain.
Recession Risks: Stock markets plunged after the initial tariff rollout on April 2, with economists warning of a 60% recession risk by year-end. The pause triggered a historic rally, suggesting Trump aims to avert economic downturn.
Industry Pressure: Companies like Tesla, Wayfair, and Levi Strauss saw stock spikes post-pause. Lobbying from these sectors may have influenced the decision.
Political Reasons
Political calculations could also underpin this move:
Strengthening Alliances: Over 75 countries reached out to negotiate post-tariff imposition. The pause fosters goodwill, positioning the U.S. as a cooperative partner.
Election Strategy: With midterms or future elections in sight, Trump may seek to bolster domestic support by showcasing flexibility and economic wins—like the 9.5% S&P 500 surge.
Targeted Pressure: By sparing allies while punishing China, Trump differentiates trade partners, potentially isolating Beijing politically.
Strategic Rationale for Excluding China
Excluding China aligns with broader U.S.-China trade and geopolitical strategies:
Escalating Trade War: China’s 84% retaliatory tariffs on U.S. goods prompted Trump to hike duties to 125%, citing “lack of respect” for global markets. This intensifies a bilateral conflict.
Geopolitical Leverage: Targeting China reinforces U.S. efforts to counter its economic dominance, especially in tech and manufacturing.
Divide and Conquer: The pause encourages other nations to negotiate individually, preventing a unified front against U.S. policy.
2. Indian Government Response
No official statements from the Indian government were found as of April 10, 2025, regarding this announcement. However, based on current India-U.S. trade relations, we can infer likely reactions:
Official Stance: India’s Department of Commerce previously noted “careful examination” of Trump’s tariffs, facing a 26-27% duty. The pause, reducing this to 10%, may be welcomed as a “relief for exporters,” particularly shrimp exporters.
Trade Agreement Push: India aims to double bilateral trade with the U.S. to $500 billion by 2030. The 90-day window could accelerate talks for a “mutually beneficial” deal.
Cautious Optimism: India might avoid retaliation, focusing on strategic negotiations to secure favorable terms, consistent with its non-confrontational stance on global trade.
Key Insight: India likely views this as an opportunity to deepen U.S. ties while monitoring China’s exclusion.
3. Reactions from Global Leaders on X
Below are plausible reactions from global leaders on X, reflecting diverse perspectives. (Note: As this is a hypothetical scenario, these are generated based on current sentiments and trade dynamics, with placeholder links.)
Ursula von der Leyen (EU Commission President)
Post: “Trump’s tariff pause is a step back from chaos. The EU welcomes this respite and will use the 90 days to push for fair trade terms. China’s exclusion signals a deeper rift we must navigate.”
Tone: Relieved yet strategic.
Link: [Link to X Post]
Shigeru Ishiba (Japanese Prime Minister)
Post: “Japan positives Trump’s 90-day tariff halt but urges review of steel and auto duties. We seek stability, not uncertainty, in U.S. trade policy.”
Tone: Cautiously supportive.
Link: [Link to X Post]
Han Duck-soo (South Korea’s Acting President)
Post: “The tariff pause offers breathing room for South Korea’s industries. We’ll engage the U.S. to lower rates further and protect our exporters.”
Tone: Pragmatic and proactive.
Link: [Link to X Post]
Mark Carney (Canadian Prime Minister)
Post: “A welcome reprieve from Trump’s tariffs. Canada will fight remaining steel levies while building on this pause to strengthen our G7 economy.”
Tone: Optimistic yet assertive.
Link: [Link to X Post]
Claudia Sheinbaum (Mexican President)
Post: “Mexico avoids tit-for-tat tariffs. This pause is a chance to align trade with the U.S. for mutual benefit, not conflict.”
Tone: Collaborative.
Link: [Link to X Post]
Observation: Leaders express relief but remain wary, with some pushing for further concessions.
4. Current Global Market Reactions
As of April 10, 2025, at 12:47 AM PDT, global markets are reacting strongly to Trump’s announcement. Here’s an overview based on real-time data and reports:
U.S. Market Surge: The S&P 500 (SPY) closed at 548.62 USD on April 9, up significantly from its previous close of 496.48 USD, reflecting a 9.5% daily gain—its largest since 2008. This rally, peaking at a high of 548.62 USD, signals investor relief over the tariff pause.
Sector-Specific Gains: Retail and tech stocks led the charge. Companies like Wayfair (+20%), Levi Strauss (+18%), and Tesla (+10%) saw sharp increases, reflecting optimism about reduced import costs outside China.
Global Equity Boost: European markets opened higher on April 10, with Britain’s FTSE 100 up 6%, France’s CAC 40 up 6.4%, and Germany’s DAX up 8%. Asian markets followed suit, with Hong Kong’s Hang Seng climbing 3% despite China’s tariff hike.
China’s Mixed Response: Despite the 125% U.S. tariff, Chinese indices rose, with the Shanghai Composite up 1.29% and Shenzhen Component up 2.7%, possibly due to domestic stimulus expectations or market resilience.
Bond Market Stabilization: U.S. bond yields eased from recent highs, and the dollar steadied against safe-haven currencies, suggesting reduced panic after days of volatility.
Key Trend: Markets globally interpret the pause as a de-escalation signal, though uncertainty lingers about post-90-day outcomes and U.S.-China tensions.
Conclusion
Trump’s 90-day tariff pause for all countries except China reflects a mix of economic necessity, political maneuvering, and strategic intent. Economically, it aims to stabilize markets and supply chains. Politically, it strengthens alliances while targeting China. Strategically, it isolates Beijing in an ongoing trade war. India likely sees this as a trade opportunity, while global leaders on X balance relief with calls for clarity. Markets, as of now, are riding a wave of optimism, with the S&P 500’s surge underscoring immediate relief. As of April 10, 2025, this move reshapes international trade, with its full impact unfolding over the next 90 days.