Trump backs down on tariffs

[UNITED STATES] President Donald Trump announced a 90-day pause on most newly imposed tariffs, aiming to stabilize financial markets rattled by previous trade measures. This unexpected move has elicited a spectrum of responses from lawmakers and industry leaders.​

Market Turmoil and Policy Reversal

On April 2, 2025, President Trump unveiled a comprehensive trade policy overhaul, introducing significant tariffs on imports from various countries, including a 25% levy on automobiles and a 10% tariff on Chinese goods. These measures contributed to heightened market volatility, with global stock markets experiencing sharp declines. In response to the ensuing economic instability, Trump announced a 90-day pause on most of these tariffs, maintaining only a 10% across-the-board levy and increasing tariffs on Chinese imports to 125%. ​

Congressional Reactions

The President's abrupt policy shift has elicited mixed reactions from Congress. Republican lawmakers largely welcomed the move, viewing it as a strategic effort to mitigate economic uncertainty and stabilize markets. Some senators praised Trump's flexibility and responsiveness to market dynamics. However, Democrats expressed concerns, criticizing the decision as erratic and politically motivated. They called for investigations into possible insider trading and raised questions about the administration's negotiation strategies. ​

Economic Implications

The initial implementation of tariffs had raised concerns about potential inflation and increased consumer prices. Economists warned that such measures could lead to higher costs for businesses and consumers, potentially dampening economic growth. The temporary rollback aims to alleviate these pressures, but analysts caution that the underlying trade tensions remain unresolved, and the long-term economic impact is uncertain. ​

Global Market Response

International markets reacted positively to the news of the tariff pause. Major indices, including the S&P 500 and Japan's Nikkei, experienced significant gains, with the S&P 500 surging by 9.5%. This rebound reflects investor relief over the potential easing of trade tensions and stabilization of global markets.

​Ongoing Trade Negotiations

Despite the temporary suspension of certain tariffs, President Trump has maintained a tough stance on China, increasing tariffs on Chinese imports to 125%. The administration emphasized the importance of flexibility amid ongoing negotiations with various nations. However, specific timelines for progress remain unclear, and countries like China are expected to maintain firm positions in trade discussions.

President Trump's abrupt decision to pause most newly imposed tariffs underscores the delicate balance policymakers must maintain between protecting domestic industries and ensuring economic stability. As global markets respond positively, the mixed reactions from U.S. lawmakers highlight the complexities of trade policy and its far-reaching implications for both the national and global economy.