President Trump has announced a 90-day pause on the sweeping global tariffs he introduced just last week, which had sparked a major sell-off across global markets. The move has eased some pressure on Wall Street, but tariffs on China have actually increased to a massive 125%, showing Trump has no intention of backing down from his trade war with Beijing.
Why the Pause?
• The tariffs caused panic in the markets and backlash from both Republican lawmakers and billionaire investors.
• Trump said the markets were getting “yippy” and admitted some flexibility was needed.
• This sudden shift caused confusion—Trump’s own team wasn’t even informed beforehand.
What Tariffs Remain?
• A 10% base tariff on imports from all countries remains (with some product exemptions).
• Autos and auto parts avoided the new 10%, but still face a 25% tariff from last month.
• Steel, aluminium, and some goods from Mexico and Canada continue to face 25% tariffs.
• Tariffs on pharmaceuticals and chips could be introduced next.
Could the Paused Tariffs Come Back?
• Trump says over 70 countries are eager to strike trade deals.
• To avoid reintroducing the tariffs in 90 days, the US aims to fast-track new agreements.
• Experts suggest Trump may switch from broad tariffs to more targeted, product-specific duties to ease pressure on manufacturers.
Why Target China So Heavily?
• China responded with its own tariffs earlier this week, escalating tensions.
• Trump sees China’s retaliation as “disrespectful” and upped the tariff rate in response.
• Despite the tough talk, Trump says a deal could eventually be reached, though China has shown no interest in talks unless terms are clearer.
Is the Trade War Over?
Not yet. Economists warn the back-and-forth and unpredictability is damaging trust and adding uncertainty to global trade.
⸻
Markets React – What Does It Mean for Investors?
• The S&P 500 fell 1.5%, while the Nasdaq dropped 2.4% — marking one of the worst quarters since 2022.
• Volatility is up, and markets have had their biggest daily swings in months.
• Uncertainty around trade and inflation may keep markets shaky in the short term.
But with uncertainty comes opportunity. If you’re a long-term investor, this could be a great time to DCA (dollar-cost average) into quality assets like the S&P 500 or diversified ETFs.
Remember: Markets move in cycles. It may get worse before it gets better, but staying consistent and ignoring the short-term noise has always rewarded patient investors.
