Trump credited his decision to pause the full effect of tariffs on the fact that "more than 75 countries had asked for negotiations over the tariffs". Source: moneycontrol

US President Donald Trump announced a significant policy shift by declaring a 90-day pause on his reciprocal tariffs, an initiative that temporarily eased trade tensions with most countries.

In this new directive, all nations except China received a 10 percent baseline tariff during the pause period, reflecting a strategic adjustment designed to encourage negotiations and relieve pressure on global trade.

Trump's announcement was made via the Truth Social platform, where he detailed that more than 75 countries had requested discussions over the tariffs, underlining the international pressure behind his decision.

However, in a stark exception to this policy, China was excluded from the tariff pause, with the US immediately imposing a steep 125% levy on Chinese imports, highlighting ongoing trade disputes and economic frictions.

In his statement, Trump justified the heightened tariff on China by citing Beijing's "lack of respect that China has shown to the World’s Markets," framing the decision as a necessary corrective measure against what he described as unfair trade practices.

The president's remarks emphasized that the move was a response to multinational calls for a reevaluation of US tariff policies, suggesting that the pause was intended to open avenues for negotiation with trading partners while isolating China on trade issues.

By authorizing a substantially lowered reciprocal tariff of 10% for the 90-day period, Trump sought to provide temporary relief to international allies and mitigate the negative impacts his earlier tariff policies had on global markets.

The impact of this announcement was immediately felt in the financial markets, with US stocks rallying dramatically; the S&P 500 surged by 9.52% to settle at 5,456.90, marking its largest one-day gain since 2008.

Similarly, the Dow Jones Industrial Average experienced a significant rebound, advancing by 2,962.86 points, or 7.87%, closing at 40,608.45—a recovery that helped to reverse a string of losses following Trump's earlier "Liberation Day" tariff announcement.

Prior market activity had been marked by volatility, with Wall Street stocks fluctuating widely and European and Asian markets, along with oil prices, experiencing sharp declines, exacerbated by a heavy sell-off in US government bonds.

This recent market surge suggests that investors and trading partners were relieved to see a de-escalation of the tariff measures affecting most nations, an indication that global pressure may be influencing US trade policies.

In a related development, China responded to Trump’s tariff escalation by doubling down on its own measures. Originally planning a modest 34% tariff on US imports, Beijing raised its toll to 84%, reflecting the intensifying nature of the trade dispute.

In conclusion, while Trump's pause on tariffs provides temporary relief for many trading partners, the continued escalation of tariffs against China underscores the deepening challenges in US-China trade relations and signals ongoing uncertainties for the global economy.