$ETH Understanding the Tariff Pause: A Brief Overview

In early 2025, the United States, under President Donald Trump, implemented a series of significant tariff increases, including a 10% universal import duty and a 145% tariff on Chinese goods. These measures aimed to reduce trade deficits and promote domestic manufacturing. However, the abrupt implementation led to market volatility and concerns over inflation and supply chain disruptions.

To mitigate these effects, the administration announced a 90-day pause on certain tariffs, particularly the "reciprocal" tariffs, providing temporary relief to businesses and consumers. This pause slightly improved consumer sentiment, as indicated by the University of Michigan Consumer Sentiment Index, which rose from 50.8 to 52.2 in April 2025.

Despite this temporary reprieve, President Trump has indicated that extending the pause beyond the initial 90 days is unlikely, signaling a potential return to higher tariffs.

Internationally, countries like South Korea are engaging in trade negotiations with the U.S. to address the impending end of the tariff pause, aiming to secure favorable terms before the July deadline.

In summary, the tariff pause serves as a temporary measure to alleviate immediate economic pressures, but its expiration may reintroduce challenges related to trade tensions and economic stability.