President Donald Trump announced on Wednesday that the U.S. will be pausing most country-specific tariffs for a period of 90 days. This move has led the European Union to also halt threats of retaliatory duties.
Despite the pause, most countries, with the exception of China, will still be subject to a baseline tariff of 10%, as confirmed by Treasury Secretary Scott Bessent in a White House press briefing on Wednesday. Specific sectors will continue to face tariffs. Trump has escalated tariffs on imports from China to 125% after the country refused to back down from retaliatory threats.
The changes are effective immediately, as confirmed by U.S. Customs and Border Protection in a notice published on Wednesday night. Any exceptions granted in the initial reciprocal tariff announcement will also remain in effect. Canada and Mexico are exempt from the 10% baseline tariff but will still face a 25% tax for goods that are not USMCA-compliant. Sector-specific duties on products like steel, aluminum, and automotive goods will remain unchanged.
Trump mentioned that he decided to pause reciprocal tariffs due to the interest shown by over 75 countries in initiating trade negotiations with the White House. Japan, Vietnam, South Korea, and India are among the countries at the forefront of these negotiations.
In response to this announcement, the European Union has decided to suspend countermeasures to U.S. tariffs for a period of 90 days to allow for negotiations. The delay in retaliatory duties from the EU could impact up to 26 billion euros’ worth of U.S. exports, covering products ranging from boats to bourbon.
Despite these developments, the trade war between China and the U.S. continues to escalate. Trump has implemented multiple tariff increases on Chinese products, with the latest rate hike being 50%. China, in response, has imposed an 84% tariff on U.S. goods effective Thursday.
The ongoing trade tensions between the U.S. and China could have significant repercussions for the global trade community, according to World Trade Organization Director-General Ngozi Okonjo-Iweala. The tit-for-tat approach between the two largest economies could severely impact the global economic outlook.
Merchandise trade between the U.S. and China could potentially decrease by up to 80%, leading to a nearly 7% reduction in the global real gross domestic product, as projected by the WTO.
Max Garland contributed to this story.