90-Day Pause on Reciprocal Tariffs, Except for China
After about ten hours and twenty minutes of reciprocal tariffs being put in place, the Trump Administration paused them, returning to the 10% baseline tariff on countries’ goods. Except for China. President Trump increased the tariff on Chinese goods to 125%.
China chose retaliation to American tariffs while pretty much every other country chose negotiation. The Trump Administration reported yesterday that over 75 countries requested negotiation over the new reciprocal tariffs, up from around 50 the administration reported right before the reciprocal tariffs were to go into place. There have been many reports about countries offering zero-for-zero tariff deals. Now, countries will have three months to work out a tariff deal with the Trump Administration.
In Tuesday’s blog, I dismissed rumors of a 90-day pause on tariffs, as those rumors were uncorroborated and the Trump Administration called them fake news. It turns out the rumors weren’t such fake news after all, only the idea that the pause would go into place before the reciprocal tariffs actually struck. At 12:01am yesterday, the reciprocal tariffs did go into place. They just didn’t last the day before the pause happened for negotiations.
It will be interesting to see if the Trump Administration looks for countries to impose tariff hikes on Chinese goods over the upcoming months of negotiations.
President Trump took to his preferred platform – Truth Social – to make the announcements about the increase on tariffs to 125% on Chinese goods and the pausing of reciprocal tariffs for other countries, returning the tariffs on them to 10%. President Trump wrote:
Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!
Secretary of the Treasury Scott Bessent met with the media yesterday to take questions concerning President Trump’s trade plan, including the reciprocal tariff pause and tariff increase on China. Here’s Fox 5 Washington DC’s video of that entire press conference, including no media commentary before or after it:
Secretary Bessent made it clear that the U.S. plans to negotiate with countries in good faith, and that’s what this three-month pause signifies. Each of the 75+ negotiations is going to take time, and President Trump wants to be personally involved. “So that’s why we’re getting this 90-day pause.”
As for China, it’s getting an increase to a 125% tariff on its goods because it “imprudently decided to retaliate against the United States,” according to the secretary. But Bessent also said, “you might even say [President Trump] goaded China into a bad position.”
China has placed 84% retaliatory tariffs on U.S. goods. However, as Bessent points out, China exports almost five times the amount of goods to the U.S. than it imports from America. That makes tariffs imposed by the U.S. on China much more damaging to its economy, which is based on exporting cheap and subsidized goods, than tariffs China imposes on U.S. goods are to the U.S. economy.
As Secretary Bessent leaves the podium, a reporter can be heard shouting about the EU retaliating, asking why it wasn’t being treated like China.
In fact, the EU, after saying it offered a zero-for-zero tariff deal on industrial goods to the U.S., announced it would put a retaliatory 25% tariff on many U.S. goods. That announcement was made on Wednesday, shortly before the U.S. announced its 90-day pause. The EU quickly suspended its retaliatory tariffs to match America’s pause.
SUM UP
- 90-Day Pause on Reciprocal Tariffs
- 10% Baseline Tariffs Still in Place
- 125% Tariff on Chinese Goods
- China Imposes 84% Retaliatory Tariff on U.S. Goods
- 75+ Countries Negotiating with Trump Administration
- EU Is Negotiating Rather Than Imposing Retaliatory Tariffs
