President Donald Trump paused his reciprocal tariff plan for most nations on Wednesday but upped his tariff on Chinese imports to 125%.
"Conversely, and based on the fact that 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately," the president wrote on Truth Social.
The reciprocal tariffs, announced April 2 in what the White House called Liberation Day, calculated a tariff rate Trump said was equal to what each country charged on American goods, including tariffs, non-monetary barriers "and other cheating." The individualized reciprocal tariffs were set to start today. The White House will keep its baseline 10% import tariffs, Treasury Secretary Scott Bessent announced Wednesday.
Since last week's announcement, the White House says world leaders have flocked to make new trade agreements.
"They are dying to make a deal," Trump said Tuesday, saying leaders were groveling to avoid new tariffs. "Please, please sir, make a deal. I'll do anything sir." Leaders from countries except China, who had yet to seek out negotiations. That country raised its tariffs on U.S. products to 84% in response to the Liberation Day announcement.
"If the U.S. truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit," says Lin Jian, spokesman for China's Ministry of Foreign Affairs. China was the third largest export market for U.S. goods in 2023, just after Canada and Mexico, the U.S.-China Business Council says. The top exports are oilseeds and grains, then oil and gas.
Treasury Secretary Scott Bessent says Trump was always planning to pause the tariffs.
"This was his strategy all along," Bessent says. "You might even say he goaded China into a bad position."
Stocks soared on news of the pause.
FTR Vice President of Trucking Avery Vise says the reciprocal tariffs announced April 2 in the White House Rose Garden were the highest since the Smoot Hawley tariffs in the 1930s. They are separate from the automotive tariffs announced earlier in the year, which do not cover new commercial vehicles but cover some of the parts; and aluminum and steel tariffs. The reciprocal tariff announcement did not cover Mexico or Canada, where most of the North American commercial vehicles and parts come from.
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"It doesn't take much to disrupt the industry," Dan Moyer, senior analyst at FTR, adding the longer tariffs last, the more disruption is likely. Parts cross borders multiple times and immigration policies are, at the same time, squeezing labor policies. Uncertainty about tariffs leading up to the announcement also spiked recession chances.
After Trump's announcement, Goldman Sachs withdrew a forecasted recession. The firm is now predicting projected fourth-quarter growth of 0.5%, a peak core PCE inflation rate of 3.5% and a 45% probability of a recession. While that is better news macroeconomically, the uncertainty of Trump's on-again, off-again decisions may cast a shadow.
That is reflected in the truck orders year-to-date and retail demand year-to-date.
"I think the rollout of the Mexican and Canadian tariffs and the two pauses that we saw set a mindset that people are like, well, we're only going to do so much about these tariffs because we're not sure if they're going to happen," Vise says. "That probably contributed to people being more exposed than they probably would be."
