U.S. President Donald Trump announced on Wednesday that he would temporarily lower tariffs on several countries, a surprising move that comes just a day after he imposed steep new tariffs on many trading partners. This shift in policy sent U.S. stocks soaring, with the S&P 500 rising more than 6%.
Trump’s decision to suspend targeted tariffs on other nations for 90 days aims to give U.S. officials time to negotiate with countries eager to reduce these trade barriers. Meanwhile, he raised tariffs on imports from China to 125%, up from the previous 104%, intensifying the ongoing trade conflict between the two largest economies in the world.
Despite the temporary relief for some countries, a 10% blanket duty on nearly all U.S. imports will stay in effect. Existing tariffs on autos, steel, and aluminum remain unchanged. The abrupt announcement has left many market analysts and business leaders puzzled, as Trump has a history of threatening tariffs only to retract them later.
This back-and-forth approach has raised concerns about market stability and economic forecasts. Goldman Sachs reacted by lowering its recession probability from 65% to 45%, citing that the tariffs still in place could lead to a significant increase in overall tariff rates.
Scott Bessent, U.S. Treasury Secretary, suggested that Trump’s strategy was to use tariffs as leverage in negotiations with over 75 countries. He indicated that this approach was intentional and that Trump might have provoked China into a difficult position, which they have responded to negatively.
The announcement caught U.S. Trade Representative Jamieson Greer off guard, as he was testifying before Congress at the time. He expressed surprise at the sudden change in strategy, indicating a lack of coordination within the administration.
Democratic Representative Steven Horsford criticized the move, suggesting that it showed a lack of clear strategy and left American consumers uncertain about the future. As negotiations with countries like Japan, South Korea, and Vietnam continue, the administration has not provided a timeline for when these discussions might conclude.