In a significant shift in trade policy, President Donald Trump announced a 90-day pause on higher tariffs for numerous countries, sparking a range of reactions across the global economic landscape. We know that the White House is doing all it can to mitigate the effects of continued market turmoil. Simultaneously, it is doubling down on pressure against what it recognizes as bad, unfair trade partners — particularly China.
In any case, Treasury Secretary Scott Bessent stressed vigorously that this policy shift was in no way a response to the recent global market collapse. Rather, it is a smart change to help alleviate a new trade reality. So far, the administration has imposed a new baseline tariff of 10% across the board on all imports. This tariff will continue to be in effect through the suspension.
Meanwhile, the European Union is preparing to roll out its own, threatened retaliatory tariffs against the United States. These tariffs are scheduled to go into effect on April 15. To head off EU retaliation, the White House had already committed the EU to a 10% limit on the US side. Their unproportional retaliatory measures had not even gone into effect yet. As it stood, the EU was scheduled to begin receiving customized tariffs of 20% next month, but this new plan changes that fairly dramatically – at least for now.
The Trump administration has called out particular countries as “worst offenders” in terms of unfair trade practices, raising tariffs on these countries accordingly. These carefully aimed tariffs largely penalize the 27 member states of the European Union, Vietnam and South Africa. They’re as low as 11% and more than 100%. The administration’s policy focuses on taking a more aggressive approach to those countries that the administration identifies as engaging in unfair trading practices.
Lin Jian, the mouthpiece of China’s foreign ministry condemned the US. In his speech, he decried their “bullying style” in setting new tariffs. This pessimism is emblematic of the deteriorating relationship between the two East Asian economic juggernauts. In return, China repelled President Trump’s blusterous threat with an equally robust promise to retaliate. Specifically, he intends to add another 50% tariff on Chinese imports, raising the new total to an extraordinary high of 104%.
Trump justified these tariff amendments by stating, “I did a 90-day pause for the people that didn’t retaliate because I told them ‘if you retaliate, we’re going to double it’ – and that’s what I did with China.” Yet he retained a certain sense of optimism about the long-term effects of all these policies, claiming that “it’s all going to work out amazing—trust me.”
Dr. Ngozi Okonjo-Iweala, head of the World Trade Organization (WTO), urged the United States to adopt “an attitude of equality, mutual respect, and reciprocity” to foster constructive negotiations aimed at resolving trade disputes. Her remarks underscore the crucial importance of diplomatic engagement as tensions rise.
The UK continues to be sheltered from these new tariff changes, having already been set beneath the baseline 10% tariff. A spokesperson for No.10 Downing Street stressed that “a trade war is in nobody’s interests.” They are hoping to inject some predictability and stability into what have been very choppy and tumultuous trade relations.
With the global community observing the unfolding of these tariff policies, the consequences of these tariffs are complex. While some countries benefit from the temporary reprieve from increased tariffs, others—especially those targeted by higher rates—are bracing for continued economic challenges.