In a surprising turn of events, U.S. President Donald Trump announced on Wednesday, April 9, 2025, a suspension of most of the "reciprocal" tariffs he had previously announced for 90 days. This suspension includes most countries except China.
In contrast, President Trump decided to significantly raise tariffs on Chinese imports from 104% to 125%, in response to what he described as "China's disrespect towards global markets" and its recent retaliatory measures.
China had announced new retaliatory tariffs on American goods, bringing the total tariffs it imposes on U.S. products to 84%. The European Union also voted to impose a counter tariff of 25% on some American imports.
Market impact forecasts:
* Rise in global markets: Global financial markets experienced a notable increase following Trump's announcement of the suspension of most tariffs. U.S., European, and Asian stocks surged significantly, as investors viewed this move as a relief from the trade pressures that had been overshadowing the global economy.
* Temporary easing of trade tensions: This temporary suspension is expected to ease trade tensions between the United States and most of its trading partners, potentially opening the door for new negotiations.
* Continued uncertainty: Despite the temporary relief, there remains a significant amount of uncertainty surrounding U.S. trade policy. The decision to raise tariffs on China indicates that the trade confrontation between the two countries is still ongoing and could escalate at any moment. Additionally, the suspension of tariffs on other countries is temporary and may be revoked after 90 days.
* Varying impact on sectors: Sectors that heavily rely on international trade are likely to benefit from this temporary suspension of tariffs, such as the technology and manufacturing sectors. Conversely, the U.S. agriculture sector may continue to face pressures due to retaliatory Chinese tariffs.
* Currency fluctuations: The currency market may experience some fluctuations as a result of these decisions, as the U.S. dollar could temporarily weaken with the reduction of fears of a comprehensive global trade war.
Summary:
President Trump's decision to temporarily suspend most tariffs has brought relief to global markets and led to a rise in stocks. However, the escalation of trade tensions with China and the ongoing uncertainty about the future of U.S. trade policy means that markets will remain sensitive to any new developments in this file in the coming period.