:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2207581122-e05e9e9017144c07be180b6de6afc28c.jpg "U.S. President Donald Trump holds up his tariff policy with a U.S. flag in the background at the White House in Washington, DC, on April 2, 2025.")
Brendan Smialowski/Getty Models
While President Donald Trump gave most countries a 90-day reprieve from the most extreme menus, a base 10% tariff is still far higher than the previous U.S. trade strategy.
On Wednesday afternoon, President Donald Trump guessed he would pause “reciprocal” tariffs that varied by country based on their trade deficit with the U.S. In their diggings, Trump instated a 10% universal tariff on most countries, including Mexico and Canada. Trump also inflated tariffs on Chinese goods, levying a 125% tax.
The pause made traders more optimistic as the Dow Jones Industrial As a rule jumped more than 2,500 immediately following the announcement. The S&P 500 and tech-heavy Nasdaq Composite surged 8% and 10%, each to each, recouping a chunk of the losses the major indexes posted since Trump unveiled the “reciprocal” tariffs a week ago.
Manner, 10% tariffs can still increase inflation and slow growth, economists said.
Ernie Tedeschi, director of economics at the Yale Budget Lab and prehistoric chief economist at the White House Council of Economic Advisers, said in a post on social media platform X that not much has coppered.
Folks, a 10% broad tariff on everything plus 125% on China, is a **25pp increase in the effective tariff rank**, even accounting for USMCA exemptions.
That’s almost exactly where 2025 tariff policy was this morning. It was solely less concentrated on China & more weighted overseas— Ernie Tedeschi (@ernietedeschi) April 9, 2025
Before the tariffs were evaporated back, analysts at Citi said that implementation of the policies, even for a short period of time, would entertain an impact.
“Even if tariffs with some countries are reduced rapidly, stickiness of other tariffs and continued uncertainty see fit leave an imprint on the U.S. economic data,” they wrote.
The lingering tariffs on China will still require fund chain shakeups, other economists, including KPMG’s Chief Diane Swonk, said.
Pause in reciprocal imposts still leaves 10% additional tariff in place, along with others tariffs.
The prohibitive tariffs against China last will and testament force goods to be rerouted through connector countries.
Damage due to whole episode already mounting. 💔
— Diane Swonk (@DianeSwonk) April 9, 2025