As of this morning, President Donald Trump has yet again made another change to the tariffs he has been implementing over the last couple of weeks. Trump has initiated a 90 day pause, meaning he is keeping the 10% baseline tariffs on all countries except for China, who received another round of tariffs, bringing their total to 125%.
The ever-changing nature of the tariffs Trump has implemented since his April 2nd “Liberation Day” has made it extremely difficult to fully understand what’s happening, so let’s break it down.
Tariffs are taxes that a government puts in place on imported goods. The U.S. is the biggest importer of goods, so U.S. businesses importing these goods are faced with paying the additional cost of the tariff. In many cases the businesses charge the consumer more for the product to offset the additional business costs, leaving the consumer paying more for a product than they typically do.
Economists fear that the rising cost of products due to the tariffs will send the United States into a recession and accelerate inflation rather than revitalize American manufacturing, as Trump claims.
Trump’s decision on Wednesday morning to take a step back from these tariffs is an unexpected move after he doubled down on his economic policy despite the sharp decline in the stock market and individuals from both sides of the aisle raising concerns about the economic state of the U.S. Urging people to stay calm, Trump wrote on social media app Truth Social “BE COOL”, and said that “Everything is going to work out well…the USA will be bigger and better than ever before.”
“This was his strategy all along…you might even say he goaded China into a bad position,” said Trump’s Secretary of the Treasury, Scott Bessent in a press conference Wednesday morning.
It’s difficult to predict what’s to come, but in light of China’s retaliatory increase of the duty on American goods to 84%, it is clear that this economic fight is far from over.