GistNexus – April 10, 2025.
In a dramatic reversal of his hardline stance on global trade, President Donald Trump announced a 90-day pause on most of his administration’s newly imposed tariffs—China notwithstanding. The sudden move came as global markets teetered on the brink, investors panicked, and the president’s own economic experts scrambled to calm mounting fears of a recession.
From Escalation to Pause
Just hours after sweeping tariffs took effect globally, the White House hit the brakes. President Trump posted on Truth Social that more than 75 countries had reached out to him for trade discussions without initiating major retaliatory measures. Consequently, he ordered an immediate 90-day suspension of what he calls “Reciprocal Tariffs,” reducing the rate to a minimum of 10% for most countries.
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China is the exception. Tariffs on Chinese goods were slashed to 125%, a reflection of the administration’s insistence on singling out Beijing in what is otherwise a global standoff.
“I backed off because people were getting panicky,” Trump told reporters. “They were afraid. The markets were afraid.”
Market Rebound After Announcement
The U.S. stock market responded with relief euphoria. The S&P 500 rebounded from a week-long decline induced by tariff fears, surging 9.5%—its biggest one-day gain since the 2008 financial crisis. Bond yields also stabilized, and global markets were next, with the Australian ASX 200 up more than 6% in early trading.
Renowned investor Bill Ackman applauded the move, calling it a “textbook” Trump’s Art of the Deal tactic. Only hours earlier, Ackman warned the U.S. economic indicators were blinking red.
“It Was Always the Plan,” Say Officials
Despite the sudden shift, administration officials continued to argue the pause was a long-term strategy. Treasury Secretary Scott Bessent, a former hedge fund manager, claimed the president had “goaded China into a bad position” and was now in a position to turn to bilateral talks with allies.
“The U.S. is going to negotiate in good faith,” Bessent said, and the next 90 days would be filled with “bespoke” deals with each trading partner.
That narrative soon unraveled as other officials gave differing explanations. Commerce Secretary Howard Lutnick attributed the action to demands from countries—not market volatility. Trump, for his part, admitted he had been watching bond markets closely and believed investors were “queasy.”
Why the U-Turn Now?
The tariffs were not negotiable, White House advisers had argued for weeks. But behind closed doors, the evidence of economic pain was mounting.
Stock market sell-offs, a weakening dollar, and soaring bond yields all reflected a lack of confidence. Big companies warned of shrinking sales and rising prices. Delta Air Lines canceled its optimistic 2025 forecast, citing chaos caused by unpredictable trade policy.
You cannot plan in this kind of environment,” Delta CEO Ed Bastian said.
Economic forecasters had also begun warning of a recession just on the horizon. “Simultaneous shocks to trade, consumer confidence, and corporate confidence could nudge the economy into a recession this quarter,” RSM chief economist Joe Brusuelas said.
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A Trade War Refocused on China
With the moratorium on for most nations, United States attention squarely turns to China. Trump’s newly levied 125% tariff rate surpasses previous levels and already has an 84% retaliatory response from Beijing on U.S. imports.
The World Trade Organization has warned this tit-for-tat can “severely damage the global economic outlook” and divide international commerce into geopolitical blocs.
China, for its part, sought solidarity from regional neighbors like Australia. But United States allies have largely declined to choose sides.
“China is comparatively well-positioned to ride out this tempest,” said economist Angela Jackson. “They are able to diversify markets. The U.S. is more dependent on cheap Chinese imports, so its own consumers are likely to carry the burden.”
The “Mar-a-Lago Accord”?
Others think the tariffs are more than that and are perhaps part of a broader fiscal policy. University of New South Wales Professor Richard Holden argued the 10% two-way tariff is more like a “national sales tax” that would offset tax cuts or budget deficits.
“If it’s an attempt to raise $600 billion a year in revenue—essentially paying for income tax cuts with tariffs—it starts to make sense,” Holden said.
He noted that Australia, already having a free trade agreement with the U.S., is still under the 10% threshold but wondered why there are any tariffs to begin with. “Zero would be best,” he stated, “but this is a step in the right direction.”
Mixed Signals from the White House
The administration’s messaging has been less than consistent. Two days before Trump’s reversal, the White House denied reports of the 90-day delay as “fake news.” Press Secretary Karoline Leavitt later asserted the change was “part of the strategy all along.”
“You all tried to say the rest of the world would pivot to China,” Leavitt said. “But in fact, they’re calling the U.S.—not Beijing—because they need our markets.”
Pressed for an explanation of why the turnaround was so abrupt, Trump responded, “It wasn’t a negotiation until it was.”
Ongoing Tariffs and Ongoing Threats
Even with the timeout, significant tariffs remain in place. Canada and Mexico will still face duties of up to 25%, due to separate orders on fentanyl smuggling. Meanwhile, auto imports, steel, aluminum, and pharmaceuticals remain subject to high tariffs, with more in the offing.
The patchwork rollout has placed numerous businesses in a state of uncertainty. Delta CEO claimed the absence of a plan was eroding confidence since Trump’s first term.
“I believe they are attempting to tackle too many things simultaneously,” stated Bastian. “It is making it difficult to plan anything more than a quarter ahead of time.”
What’s Next Following 90 Days?
The White House says the next three months will be filled with one-on-one trade negotiations, but there’s little clarity on what comes after the pause expires. Economists and trade experts alike warn that the uncertainty could be just as damaging as the tariffs themselves.
“We’re not out of the woods,” said John Canavan, an analyst at Oxford Economics. “This pause may just delay the inevitable unless real deals are made.”
Bessent has expressed optimism, saying he expects the economy to be “back to firing on all cylinders” soon. Countries like Japan, South Korea, and India have already scheduled talks.
“We’ve had an overwhelming response from nations that would rather talk than escalate,” Bessent said.
A Tactical Retreat or Strategic Pivot?
President Trump’s tariff truce has provided temporary relief to anxious markets and opened the window to potential trade deals. But it also illustrates the unpredictability that has marked his second term.
Whether this is a tactical retreat in response to market pressure—or part of a grand strategy to encircle China—time will tell. For the moment, the world waits as Trump reshapes global trade one headline at a time.
GistNexus will continue to monitor developments as negotiations unfold and the 90-day clock ticks away.
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Reported by GistNexus Team and Edited by Mr. Chibueze Onwuka