For weeks, President Donald Trump has plowed ahead with plans to impose steep new tariffs on imports despite warnings that the policy could trigger economic chaos. On Apr 9, after a multi-day plunge in global stock markets, he changed course.
In a social media post, Trump said that a set of tariffs on imports from many of America’s largest trading partners were paused. The announcement came only 13 hours after the duties had gone into effect.
Trump indicated that turmoil in the financial markets following the implementation of the tariffs played a role in his decision. Here’s what to know.
WHAT TARIFFS DID TRUMP PAUSE?
Trump announced a 90-day pause on what the administration termed “reciprocal” tariffs on imports from almost 60 countries and the European Union. The tariffs were customised to each trading partner and corresponded to the size of their trade surplus with the US.
Imports from those trading partners will now be subject instead to the flat duty of 10 per cent that Trump placed on goods arriving from all foreign countries starting Apr 5.
China, one of the countries subject to the reciprocal tariffs, was not included in the pause. Instead, Trump announced that he would increase levies on Chinese goods to 125 per cent from 104 per cent.
Trump’s decision came after Beijing announced plans to retaliate with an 84 per cent duty on American goods.
In his Wednesday (Apr 9) post, Trump said that other countries subject to the tariffs “have not, at my strong suggestion, retaliated in any way, shape, or form”.
WHY DID TRUMP PAUSE SOME TARIFFS?
The implementation of the reciprocal tariffs caused market turmoil and stoked recession fears. Trump came under massive pressure from business leaders and investors to reverse course.
“I thought that people were jumping a little bit out of line,” Trump told reporters at the White House when asked why he backed off. “They were getting a little bit yippy, a little bit afraid.”
