In an unexpected turn from his belligerent trade control policy, former president Donald Trump has announced a 90-day hold on the highest tariffs that had been imposed by him on dozens of countries. The announcement on the temporary measure, which will exclude China, by the way, viewing that China will instead see a tariff hike of as much as 125%, was made via a post on Trump’s Truth Social network. The world has been gripped by fears of potential trade wars and their resulting economic malaise.
If one gets the knack to actually decipher the message in Trump, it suggests that henceforth, all other nations, including Mexico and Canada as important trading partners, will be subjected to a general tariff of 10% on all imports. It is certainly a massive change from the previous arrangements whereby both North American neighbors were previously excluded from tariff charges under the provisions of the United
States-Mexico-Canada agreement (USMCA).
As claimed by the Trump administration, approximately 75 countries made requests demanding negotiations on tariffs and their manipulation, as well as their application on various non monetary trade barriers. While there was no announcement of the full list of states, it is thought to include members from the European Union, South Korea, and Japan, Australia, Brazil, and India. Those countries will now be subjected to the impressive reduced Universal 10% tariff rather than biting penalties that had initially been imposed.
Mexico and Canada would no longer continue enjoying their long-term status as total benefits in a free trade arrangement but will be treated at a reduced tariff threshold along with other nations.
Read now: How old is Barack Obama, when was he president of the United States and what does he do now?
Positive reactions from markets
Mr. Trump needs to announce things that create a fresh immersion. All international capital markets would shiver by that. Wall Street soared high, with gains ranging between 6% and 8%. According to Natalie Sherman, business reporter from the BBC, the fear had been induced by announcements made last week for some sweeping tariffs and revived again as it eased off.
A flat 10% tariff is yet closer to the kind of thing Trump campaigned on during his presidency,” Sherman stated. “This allows investors to quite better appreciate what it is.
A harder line against China
Most nations would enjoy a temporary reprieve; China is on Trump’s radar. Import duties on all Chinese items shall henceforth go up to 125%. Trump backed this up by calling it China’s reaction to punitive measures in trade as well as its so-called “dishonor” against the markets worldwide. “At some point, I hope sooner than later, China will understand that stealing from the U.S. and other countries is no longer sustainable or acceptable,” Trump’s letter said.
Scott Bessenet, Treasury Secretary, reinforced the message set by the administration: “There’s just no other option, really, except for the course of action taken by the U.S. Treasury to be decisive.”
What’s the future of global trade?
The 90-day moratorium will not be the end of the story because administration officials have indicated a willingness to talk, suggesting that it could lead to longer-term trade deals. For the moment, it seems that Trump is moving slightly away from hard-core protectionism and toward strategic pressure with tariffs-as-bargaining-tokens without an economic barrier.
For now, dozens of countries are enjoying a break-but the world’s gaze is turned toward what will happen once the 90 days are up.
