Trump said that he would suspend tariffs for 90 days for countries that do not retaliate: I didn’t expect it to have such a big impact.
I. Policy Background and Core Content
On April 9, 2025, US President Trump announced that he would suspend the “reciprocal tariff” plan for 90 days for 75 countries that have not imposed retaliatory tariffs, and reduce the reciprocal tariff rate to 10%. At the same time, he increased the tariffs on China from 104% to 125%. The direct background of this policy adjustment is the dual impact of domestic economic pressure in the United States and the international countermeasure wave:
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Aggravation of domestic economic risks: The US stock market plummeted due to the uncertainty of the tariff policy. The Nasdaq index once fell by more than 10% in a single day, and market panic spread. Farmers in agricultural states such as Texas faced a loss of $25 per acre due to China’s countermeasures, which is equivalent to working in vain for a year.
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Escalation of international countermeasures: China imposed an additional 84% tariff on the United States. The European Union announced that it would impose a 25% retaliatory tariff on the United States starting from April 15. Allies such as Canada and Japan followed suit simultaneously. The global trade system has fallen into a vicious cycle of “tit for tat”.
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Pressure of political games: Criticism of the tariff policy within the Republican Party has intensified. Seven senators jointly demanded that Congress take back the power to impose tariffs. Major donors such as Jim Rogers, the founder of the Quantum Fund, publicly opposed the tariff policy.
Trump claimed on social media that “75 countries took the initiative to seek negotiations”, trying to package the policy adjustment as a “negotiation victory”, but in essence, it is a compromise to domestic and foreign pressures. The core logic of this policy lies in: by suspending tariff pressure on small and medium-sized countries, dividing the anti-US alliance, and concentrating resources to carry out “precision strikes” against China.
II. Policy Motivation and Deep-seated Logic
Trump’s tariff adjustment is not an isolated event, but a continuation of his “America First” strategy, with three political and economic considerations hidden behind it:
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Shifting domestic contradictions: The core CPI in the United States rose by 3.1% year-on-year in February, and inflation pressure remains high. The average annual purchasing power loss of ordinary families reached $3,800. Suspending tariffs can temporarily ease the upward pressure on the prices of imported goods and gain a policy buffer period for the Trump administration.
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Remodeling trade rules: The US Treasury Secretary clearly stated that suspending tariffs is to “reach an agreement with allies and deal with China’s issues in a group manner”. Through the strategy of “divide and rule”, the United States attempts to build a united front against China and weaken China’s position in the global supply chain.
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Considerations of the electoral cycle: With the approach of the 2026 mid-term elections, Trump needs to appease voters in agricultural states and manufacturing interest groups. Suspending tariffs can boost market confidence in the short term and accumulate political capital for his re-election campaign.
However, there is a significant deviation between the actual effect of this policy and the expectations. For example, after the United States suspended tariffs on 75 countries, China can still maintain its exports to the United States through entrepot trade. On the contrary, US enterprises face greater pressure due to the increased costs of supply chain adjustments.
III. Global Impact and Chain Reactions
- Short-term Pain for the US Economy:
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Stock market fluctuations: The news of the suspension of tariffs stimulated a short-term rebound in US stocks. However, Citibank pointed out that the 10% benchmark tariff still increased the effective tax rate in the United States by 21 percentage points compared with the beginning of the year, and the risk of economic slowdown has not been fundamentally eliminated.
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Inflation stickiness: The core PCE in the United States rose by 2.8% year-on-year in February. The increase in import costs caused by the tariff policy may offset the effect of the Federal Reserve’s interest rate cuts, creating “stagflation” pressure.
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Corporate dilemma: Tesla’s global sales declined due to the tariff policy, and its stock price plummeted by more than 30% within the year, with its market value evaporating by $940.2 billion.
- Reconstruction of the International Trade Pattern:
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Supply chain restructuring: The European Union is accelerating the layout of a “de-Americanized” supply chain. ASEAN countries are filling the gap in US agricultural products. Brazil’s soybean exports to China increased by 45% year-on-year.
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Damage to multilateral mechanisms: The WTO predicts that the US tariff policy may lead to a 1% shrinkage in global merchandise trade volume in 2025. The multilateral trading system is facing the most serious crisis since World War II.
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Rise of regional cooperation: The trade volume of RCEP member countries has increased to 30% of the global total. The trend of “de-dollarization” is accelerating, and the transaction volume of the Cross-Border Interbank Payment System (CIPS) of the Renminbi has increased by 67% year-on-year.
- Spillover of Geopolitical Risks:
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Rifts in ally relations: The EU’s retaliatory tariffs on the United States cover areas such as agricultural products and automobiles. German car companies plan to transfer some of their production capacity to China.
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Escalation of the technological cold war: The United States has included 12 Chinese entities in the export control list, and China has restricted the export of strategic resources such as rare earths. The global semiconductor supply chain faces the risk of disruption.
