In April 2025, President Donald Trump announced a **90-day pause** on steep "reciprocal tariffs" imposed on numerous U.S. trading partners, marking a significant shift in trade policy. This decision, framed as a strategic move to facilitate negotiations, has sparked debates about its economic impact, political motivations, and long-term consequences. Below, we break down the key aspects of the **#TariffPause**, its drivers, and its effects on global markets.

## **What Prompted the Tariff Pause?**

Three major factors influenced Trump’s decision to temporarily halt tariff hikes on most countries (excluding China, Hong Kong, and Macau):

1. **International Negotiation Pressure**

- Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick reported that numerous countries were urgently seeking trade talks, creating an opportunity for the U.S. to "isolate China" by forming alliances with other nations .

- The administration framed this as a strategy to "put a ring around China" while securing better trade terms elsewhere .

2. **Market Turmoil and Political Pressure**

- After days of stock market declines and bond market instability, Trump faced mounting pressure from CEOs, GOP senators, and foreign allies to ease trade tensions .

- A false rumor about a tariff pause briefly boosted markets, reinforcing the White House’s belief that stability required de-escalation .

3. **China’s Retaliatory Tariffs**

- China’s decision to raise tariffs on U.S. goods to **125%** gave Trump leverage to present the pause as a goodwill gesture to other nations .

## **Key Features of the Pause**

- **Duration:** 90 days (until July 2025) .

- **Scope:** Applies to **59 countries**, but **China, Hong Kong, and Macau face even higher tariffs (145%)** .

- **Baseline Tariff:** A **10% universal tariff** remains in place for all other nations, replacing previous free-trade agreements .

- **Exemptions:** Pharmaceuticals, semiconductors, and some energy products are excluded .

## **Economic Impact: Relief or Continued Uncertainty?**

### **1. Short-Term Market Reactions**

- **Stock markets surged** briefly after the pause announcement but later fell again due to lingering uncertainty .

- The IMF downgraded **global growth forecasts** to **2.8% for 2025**, citing trade tensions as a major drag .

### **2. Winners and Losers**

- **Beneficiaries:** Vietnam, South Korea, and other export-dependent economies avoided immediate economic shocks from higher tariffs .

- **Still Vulnerable:**

- **China** faces **145% tariffs**, effectively cutting off most trade with the U.S. .

- **Least-developed countries (LDCs)** may suffer from trade diversion and reduced export opportunities .

### **3. Long-Term Risks**

- **WTO Warning:** Global trade could contract by **1.5%** if tensions escalate further .

- **U.S. Recession Risk:** The IMF now estimates a **40% chance** of a U.S. recession in 2025 .

## **What’s Next?**

- **Country-by-Country Negotiations:** The U.S. will engage in bilateral talks to secure trade deals before the pause expires .

- **Potential Extension:** Trump has not ruled out prolonging the pause if progress is made .

- **Global Trade Realignment:** Businesses are reassessing supply chains, with some shifting production away from China .

## **Conclusion: A Temporary Respite or Prolonged Instability?**

While the **#TariffPause** provided temporary relief, it has not resolved underlying trade tensions. The **IMF and WTO warn** that policy unpredictability remains a major drag on global growth . Investors and businesses must prepare for **continued volatility**, especially if negotiations fail and tariffs snap back in July.

For further details, refer to sources like the [WTO’s trade forecast](https://www.wto.org/) or the [IMF’s latest economic outlook](https://www.imf.org