President Trump pauses most tariffs yet increases them on China ... was this his plan or a reaction? ... the bigger story unfolding here – major conflict with China At roughly 1:30 eastern time this afternoon, President Trump made two big announcements: - He's raising tariffs on imports from China to 125% "effective immediately" because of the "lack of respect that China has shown to the World's Markets"
- He's implementing a 90-day pause on "more than 75 countries" that have reached out to U.S. officials "to negotiate a solution" to trade wars
Here's Trump on the second point: Based on the fact that more than 75 Countries... have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
As I write near 3:00 pm, the stock market is soaring in relief. The Dow is up about 6%, the S&P has climbed almost 7%, and the Nasdaq is nearly 9% higher. Let's back and fill in some details Effective last night at midnight, the U.S. tariff rate on Chinese goods jumped to 104%.
President Trump's tariffs on dozens of other countries also went into effect. A few examples included 47% duties on imports from Madagascar, 46% on Vietnam, 32% on Taiwan, 27% on India, 24% on Japan, and 20% on the European Union.
Retaliatory tariffs were on the way.
Beijing announced that beginning tomorrow, tariffs on U.S. products entering China will climb from 34% to 84%.
And earlier today, the European Commission voted in favor of its own retaliatory tariffs. From CNBC: The European Commission, the bloc's executive arm, said duties would start being collected on a first tranche of tariffs on U.S. imports from April 15, with a second set of measures following on May 15.
According to a draft document seen by CNBC in March, the tariffs target a wide range of goods, including poultry, grains, clothing and metals. The EU has not released a final list of impacted products.
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In the background, public opinion has been souring in recent days This morning, before Trump's pause, JPMorgan Chase CEO Jamie Dimon said: I think probably [a recession is] a likely outcome, because markets, I mean, when you see a 2000-point decline [in the Dow Jones Industrial Average], it sort of feeds on itself, doesn't it?
It makes you feel like you're losing money in your 401(k), you're losing money in your pension. You've got to cut back.
This comes after billionaire hedge fund manager Bill Ackman wrote a long post on X that included: If... on April 9th we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.
Meanwhile, public opinion on tariffs has been going the wrong way. Here's Ipsos from yesterday: Less than half of Americans support 25% tariffs on all cars and trucks made outside the U.S. or tariffs of at least 10% on all of the U.S.' trading partners...
Three in four say that over the next six months, prices will increase for personal electronics and phones (77%), automobiles (73%), and the items they buy everyday (73%). Majorities also say the same of household appliances (72%), fresh produce (70%), home repairs and improvements (62%), and dairy items such as milk and cheese (56%).
And this morning's new Economist/YouGov poll showed that 51% of respondents disapproved of the job Trump is doing as president, versus 43% who responded positively.
Was all this getting to President Trump?
This morning, when the markets opened in the red yet again, Trump posted on Truth Social: BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before.
Not long after that, he posted: THIS IS A GREAT TIME TO BUY!!!
Word from the Trump Administration is that today's tariff pause wasn't a cave-in to pressure, but was Trump's plan From CNBC: [Treasury Secretary Scott Bessent] says that Trump was always planning to pull back his sweeping tariff plans for dozens of countries just days after announcing it.
"This was his strategy all along," Bessent tells reporters at the White House.
"You might even say he goaded China into a bad position," Bessent says, referring to the fact that China, which imposed retaliatory tariffs, now faces higher U.S. duties while others get a reprieve.
Whatever is behind the change of heart, a tariff pause is here.
To be clear, the blanket 10% tariff remains in effect. This could have very real effects on business wholesale costs, consumer prices, and inflation.
However, Bessent says that Trump wants to be "personally involved" in negotiations with each country's tariff rate. This is why the 90-day pause is needed.
From Bessent: Each one of these is going to be a separate, bespoke negotiation.
So, the hope is that the ultimate tariff rates will land somewhere far lower than before, enabling us to skirt major economic damage.
Whatever the outcome, for the moment, Wall Street doesn't care. Its feet are no longer being held to the fire. China suddenly appears isolated and in a difficult negotiating position Let's return to President Trump's official announcement: At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.
The new 125% tariff leaves China in a tough – and potentially dangerous – spot. After all, if Beijing feels trapped, it's more likely to go big with its response.
From The Wall Street Journal: In the years since President Trump's first trade war with China, Beijing has built an arsenal of tools to hit the U.S. where it hurts. Now, it is getting ready to deploy them in full.
On Wednesday, China said it would increase tariffs on all U.S. imports to 84%, a response to new U.S. tariffs on Chinese imports of 104% that went into effect at midnight. It also added six U.S. companies including defense and aerospace-related firms Shield AI and Sierra Nevada to a trade blacklist, and imposed export controls on a dozen American companies including manufacturer American Photonics and BRINC Drones...
Tools that Beijing has already used and is likely to expand include export controls of critical materials American companies use to make chips and defense-related products, regulatory investigations designed to intimidate and penalize U.S. companies, and blacklists intended to bar U.S. businesses from selling to China.
In addition, authorities are preparing new ways to pressure American companies to give up their crown jewels—intellectual property—or lose access to the Chinese market.
We'll bring you more on this in tomorrow's Digest. As we see it, there's a bigger story here than tariffs – it's our intensifying war with China over technological, economic, and ideological dominance.
But today, let's just take a moment to breathe a sigh of relief.
While there's likely plenty of turbulence in our future, for the moment, the sun is shining.
Have a good evening,
Jeff Remsburg | 
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