In a dramatic reversal that stunned global markets, US President Donald Trump on April 9 announced a 90-day suspension of heightened tariffs for over 75 countries, just hours after new levies went into effect. This move, which comes amidst mounting pressure from corporate America and financial markets, sparked a sharp global rally and reversed recessionary fears that had been looming since the escalation of Trump’s aggressive tariff policy.
Highlights:
Trump announces a 90-day tariff pause after duties took effect on April 9.
The baseline 10% reciprocal tariff on imports remains in place.
The announcement fuels a global market rally, easing recession concerns.
Trump’s Sudden Turnaround on Tariffs: What Prompted the Pause?
The decision to halt the implementation of elevated duties came just 13 hours after sweeping tariffs were enforced on 56 countries and the European Union, sending shockwaves through markets. Citing concerns raised by investors and business leaders, Trump opted for a temporary reprieve while maintaining a 10 percent baseline reciprocal tariff on all imports. He characterized the pause as a strategic move to create leverage in trade negotiations.
Speaking at the White House, Trump said the idea emerged after high-level discussions with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. The sudden pivot, he claimed, was aimed at calming markets that had reacted with extreme volatility and at rewarding nations that did not retaliate against the US.
Highlights:
Trump paused additional tariffs following market backlash and business concerns.
Maintains that the move strengthens the US’s negotiating position.
Baseline import tariff of 10% remains applicable during the pause.
What Are the Current Tariff Rates in Effect?
As of April 9, the US has enforced a 10 percent reciprocal tariff on all goods entering the country. This baseline rate has not been removed. The previously announced additional tariffs were targeted at countries with large trade surpluses against the US and those deemed to be engaging in “unfair trade practices.”
Separate tariffs also remain in effect for specific categories including steel, aluminum, and automobiles. These range between 10 and 25 percent, depending on the origin and nature of the goods. Tariffs on goods from Canada and Mexico will remain unchanged for now, except where governed by the North American trade agreement.
Highlights:
10% reciprocal tariff on all imports is still in effect.
Additional tariffs on steel, aluminum, and autos remain unchanged.
Canada and Mexico retain preferential status under existing trade pacts.
Escalation With China: A Breakdown of US-China Tariff Measures
China has borne the brunt of Trump’s escalating trade war rhetoric. Prior to the April 9 pause, the US had successively imposed tariffs on Chinese imports: an initial 20 percent duty, followed by an additional 34 percent. China retaliated with an equivalent 34 percent levy on US goods. Trump then escalated the confrontation with an additional 50 percent tariff, bringing the total to 104 percent.
However, during the pause announcement, Trump upped the ante again, declaring a 125 percent tariff rate on Chinese goods, signaling no softening in the administration’s stance toward Beijing. China’s retaliatory tariff on American imports currently stands at 84 percent, with no rollback announced in response to the US pause.
Highlights:
US tariffs on Chinese goods now stand at 125%.
China maintains an 84% tariff rate on American imports.
The tariff pause does not apply to China, which remains the primary target.
Why the Sudden Shift? Market Reaction and Political Pressure Mount
Over the past week, corporate leaders, trade groups, and major institutional investors had voiced alarm over the potential economic fallout of the tariff increases. The timing of the announcement—hours after the new tariffs took effect—suggests it was a last-minute decision driven by severe market turbulence.
Treasury Secretary Bessent described the reversal as a tactical victory that gives the administration greater bargaining power. Trump, for his part, said businesses were overreacting and that the “yippy” behavior of markets required reassurance. Despite the pause, the White House continues to frame tariffs as a necessary tool to rebalance trade relations and punish perceived unfair practices.
Highlights:
Intense lobbying by businesses and investors pushed Trump to reconsider.
Treasury frames the move as a calculated strategy for leverage.
Trump downplays market fears, but responds with immediate action.
Who Is Exempted From the Higher Tariffs?
According to Trump, over 75 countries that chose not to retaliate against the US were granted temporary exemptions from the heightened tariffs. While the official list has not yet been published, early reports suggest that India—previously labeled a “tariff abuser” by Trump—has secured exemption status amid ongoing bilateral trade talks with Washington.
Discussions with other Asian and European economies are reportedly underway, with Bessent set to speak to officials from Vietnam, Japan, South Korea, and India in the coming days. These talks may shape the future of the tariff pause and determine whether it becomes permanent or evolves into a renegotiated trade framework.
Highlights:
Over 75 countries granted temporary tariff exemptions.
India reportedly among exempted nations due to active trade dialogue.
Further discussions underway with key Asian trade partners.
Pharma, Steel, and Auto Sectors Not Spared
Despite the sweeping reprieve for many goods, Trump reiterated that certain sensitive sectors would continue to be subject to elevated duties. Imports of pharmaceuticals, in particular, are expected to remain under scrutiny, with the president insisting on moving ahead with drug tariffs as part of his broader healthcare agenda.
Similarly, steel, aluminum, and automobile tariffs remain in place, indicating a selective approach that continues to favor US industrial policy goals. Companies in these sectors are unlikely to see relief unless they fall under country-specific exemptions or negotiate directly with US trade representatives.
Highlights:
Pharmaceutical imports remain subject to existing tariffs.
No relief announced for steel, aluminum, and auto sectors.
Sector-specific tariffs aligned with US domestic industrial priorities.
Global Markets Stage a Historic Rally on Tariff Pause News
Financial markets worldwide reacted euphorically to Trump’s announcement. The S&P 500 Index surged by 9.5 percent, marking its strongest single-day rally since the 2008 financial crisis. The Nasdaq 100 jumped 12 percent, driven by tech stocks, while Asian bourses recorded their biggest single-session gains in over two years.
Goldman Sachs, which had recently predicted a US recession, retracted its forecast in light of the policy reversal. Chinese equities also rallied sharply, buoyed by optimism that additional stimulus measures could be unveiled to cushion the economic impact of ongoing trade tensions.
Highlights:
S&P 500 posts 9.5% gain, Nasdaq 100 jumps 12%.
Asian markets see strongest rally in over two years.
Goldman Sachs withdraws its recession forecast following Trump’s decision.
