The U.S. is pausing most country-specific tariffs for 90 days, President Donald Trump announced Wednesday, prompting the European Union to halt threats of retaliatory duties.
Most countries besides China will still be subject to a 10% baseline tariff, Treasury Secretary Scott Bessent said in a White House press briefing Wednesday, with sector-specific tariffs remaining in place. Trump has raised tariffs on imports from China to 125% after the country refused to back down from threats of retaliation.
The changes are effective immediately, U.S. Customs and Border Protection confirmed the suspension in a notice published Wednesday night. Any exceptions that were granted in the initial reciprocal tariff announcement will also remain in effect, per the agency. Canada and Mexico are currently exempt from the baseline 10% tariff, but will still be subject to a 25% tax for non-USMCA-compliant goods. Meanwhile, sector-specific duties on goods like steel, aluminum, and automotive products remain in place.
Trump said he was pausing his reciprocal tariffs because more than 75 countries have reached out to the White House to initiate trade negotiations. Japan, Vietnam, South Korea and India are “at the front of the queue,” according to Bessent.
In response to the announcement, the European Union will pause countermeasures to U.S. tariffs for 90 days “to give negotiations a chance,” European Commission President Ursula von der Leyen announced Thursday. The EU’s delayed retaliatory duties would cover products ranging from boats to bourbon and impact up to 26 billion euros’ worth of U.S. exports.
“If negotiations are not satisfactory, our countermeasures will kick in,” von der Leyen said Thursday. “Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.”
Meanwhile, the trade war between China and the U.S. continues to escalate.
Trump has enacted multiple tariff hikes on China since February, most recently increasing the rate charged to products from the country by 50%. Prior to Trump’s most recent announcement, the White House indicated that all previous tariffs on China would stack for a total 104% rate. China has responded in kind, leveling an 84% tariff on the U.S., effective Thursday, to coincide with previous countermeasures.
The continued back and forth between the U.S. and China could have devastating effects for the global trade community, per World Trade Organization Director-General Ngozi Okonjo-Iweala.
“This tit-for-tat approach between the world’s two largest economies, which together account for roughly 3% of global trade, carries wider implications that could severely damage the global economic outlook,” Okonjo-Iweala said in a statement Wednesday.
Merchandise trade between the U.S. and China could see an up to 80% decrease, based on WTO projections, Okonjo-Iweala said. WTO estimates the decline would drive a nearly 7% reduction in the global real gross domestic product.
Max Garland contributed to this story.
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