Trump announces a 90-day break in tariffs, except for China

Trump announces a 90-day break in tariffs, except for China

President Donald Trump has announced a comprehensive three -month suspension of all “mutual” tariffs that came into force at midnight, with the exception of China. This represents a surprising change of course from a president who had insisted that the historically high tariffs would remain.

increase in tariffs to China

The enormous tariffs in China, the second largest economy in the world, remain. Trump explained that these are raised from 104% to 125% after China announced additional retaliation tariffs against the United States on Wednesday. In a contribution on his social media, Trump said: "Based on the lack of respect that China showed towards the world markets, I hereby increase the customs raised by the United States of America to China to 125%." He added: "Hopefully China will soon realize that the days in which they could take advantage of the USA and other countries are no longer sustainable or acceptable."

market reactions on the announcement

Wall Street, however, breathed a relief that Trump ranged back on other extreme trade measures. The stock markets experienced a significant increase, although the universal customs of 10% continue to exist on all imports to the United States. In a contribution to Truth Social, Trump explained: "I approved a 90-day break and a significantly lower mutual customs during this time of 10%, also effective from now on."

strategies and negotiations

After the announcement, Finance Minister Scott Bessent said that the break was part of "his strategy from the start", and emphasized that Trump had "the courage to keep the course until that moment". Bessent had previously talked to Trump about the tariffs in Mar-A-Lago on Sunday and encouraged him to strive for new agreements with different countries. He stated that Trump would "personally be involved in all talks" in order to achieve concessions. "Nobody creates as much pressure as President Trump," he said.

China's reaction to the customs increase

The increased tariffs in China take place after Beijing has announced new retaliation tariffs of 84% on US goods that are to come into force on Thursday. The Trump administration has particularly targeted China's trade practices. Besser said: "We will see what China is doing, but I am sure that what China does will affect her economy much more than ours." In a statement by the State Council Council, the US increase in tariffs is called "mistakes on errors", which seriously violates the legitimate rights and interests of China and seriously damages the multilateral trading system on rules.

could a recession be averted?

economists have significantly increased their forecasts for an upcoming recession after Trump introduced a tariff package that provides the tariff of up to 50% for dozens of countries. While the 90-day break may be welcome for investors, it is unlikely to prevent a recession, said Joe Brusuelas, chief economist from RSM US. "In my opinion, the US economy will probably slip into a recession, given the simultaneous shocks that it absorbed," said Brusuelas in an interview.

Jake Colvin, President of the National Foreign Trade Council, who represents a wide range of importers, described the break as "a step in the right direction". However, he warned: "Do not let us celebrate that this still seems to leave a new starting point of 10% tariffs to most countries, plus considerable taxes on China, steel, aluminum and cars, with the promise of other tariffs." Ultimately, the break does little to take away the uncertainty with which they have been faced with Trump's election victory in November.

This story is further developed and updated.

Reporting of CNNS Alicia Wallace.