In a significant shift in trade policy, U.S. President Donald Trump has authorized a 90-day pause on tariff increases for most countries, excluding China. This decision aims to provide an opportunity for negotiations with various nations, while concurrently escalating tariffs on Chinese imports.​

Details of the Tariff Adjustments

  • Tariff Pause: Effective immediately, the U.S. will suspend planned tariff hikes for 90 days on imports from countries that have not engaged in retaliatory measures against the U.S. ​
  • Increased Tariffs on China: In contrast, tariffs on Chinese imports have been raised to 125%, up from the previous 104%, reflecting heightened tensions between the two largest economies. ​

Rationale Behind the Decision

President Trump stated that the pause was authorized after more than 75 countries expressed a willingness to negotiate and refrained from retaliatory actions. He emphasized that China continues to “rip off” the United States, justifying the increased tariffs on Chinese goods. ​

Market Reactions

The announcement led to a surge in global stock markets. The S&P 500 experienced a 9.5% increase, the Dow Jones rose by 7.9%, and the Nasdaq climbed 12.2%. Asian markets also responded positively, with Japan’s Nikkei 225 jumping 9.1%. ​

Implications for Pakistan

In response to the U.S. tariff adjustments, Pakistan has decided to send a high-level delegation for trade talks with the United States. Prime Minister Shehbaz Sharif constituted a 12-member steering committee to address the reciprocal tariffs, as initial estimates suggest these duties could cost Islamabad between $500 to $700 million. ​

Conclusion

The 90-day tariff pause offers a window for diplomatic negotiations with various countries, while the increased tariffs on China signal a continuation of the U.S.-China trade dispute. The global economic community will be closely monitoring these developments and their potential impacts on international trade dynamics.​