U.S. announces 90-day tariff pause for most nations, China excluded

President Trump paused tariffs for 90 days on all countries except China, reducing them to 10%, following U.S. Treasury concerns over market instability. However, tariffs on Chinese goods were increased to 125%. India, affected by a 26% tariff, welcomed the pause, allowing market recovery and continued talks for a balanced bilateral trade agreement.

On Wednesday, U.S. President Donald Trump announced a 90-day pause on his wide-ranging reciprocal tariff regime for all countries except China—a surprising reversal of his firm trade stance. Trump had introduced the tariffs to address what he described as a trade imbalance with the U.S. He claimed that over 75 countries had chosen to negotiate rather than retaliate, prompting the temporary relaxation. During this 90-day period, a significantly reduced reciprocal tariff of 10% would be imposed, down from higher original rates.

This move came despite mounting pressure from fellow Republicans and business leaders urging Trump to reverse the tariffs due to fears of a major trade war, global market instability, and a potential worldwide recession. Trump had previously dismissed these concerns, asserting his unwavering commitment to his trade policies.

The key factor behind the pause, according to CNN, was growing concern within the U.S. Treasury Department over a sharp selloff in the bond market. Treasury Secretary Scott Bessent reportedly voiced these worries directly to Trump, supported by White House economic advisors. The sudden shift suggested Trump’s decision was more reactive to immediate financial pressures than a result of long-term strategic planning.

However, China was excluded from the pause, with Trump instead escalating tariffs on Chinese goods from 104% to 125%. 

President Trump wrote on Truth Social, “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 US and other countries, is no longer sustainable or acceptable.”

India, which had been hit by a 26% reciprocal tariff on its exports to the U.S., saw its markets decline in response. However, the 90-day reprieve offers breathing space for recovery and allows for continued trade negotiations. India’s Ministry of External Affairs confirmed that discussions with the U.S. are ongoing, aiming for a swift conclusion to a comprehensive and mutually beneficial multi-sectoral bilateral trade agreement.