Washington, DC, in the United States: With the exception of China, US President Donald Trump announced on Wednesday that his broad tariffs on all nations would be suspended for 90 days. This unexpected move came just a day after it seemed highly unlikely.  According to Trump, the decision followed successful negotiations with over 75 countries, none of whom retaliated against the US.  During this 90-day period, a reduced reciprocal tariff of just 10 percent would be in effect, he stated.  However, the situation with China was different.  Trump announced an immediate increase in Chinese goods tariffs, increasing them from 104% to 150,000%. Trump shared his reasoning on Truth Social, writing, "Due to China's lack of respect for global markets, I am increasing tariffs on China to 125%, effective immediately.  At some point, China will realize that exploiting the US and other countries is no longer sustainable or acceptable."  He added, "China wants a deal but isn't sure how to approach it... President Xi Jinping is proud, and while they don't know how to go about it, they will figure it out."

Why Did Trump Pause the Tariffs?

 Trump had been urged to stop the tariffs by Republicans and business leaders for days because they were worried about a trade war, a crash in the global market, and a possible recession. Despite the pressure, Trump remained firm, insisting, "My policies will never change."  

 By Wednesday, it appeared that the push to reverse the tariffs had failed, and they would go into effect as planned.  However, a growing sense of alarm within the Treasury Department, particularly concerning developments in the bond market, prompted the tariff pause.  According to CNN, Treasury Secretary Scott Bessent alerted Trump to the concerns, and White House economic officials briefed him on the escalating selloff in the US Treasury market. 

 When speaking to reporters after the announcement, Trump revealed that the decision was likely made on impulse rather than as part of a carefully planned strategy.  The bond market is complicated. I was watching it.  It looks beautiful now, but last night, people were getting a little uneasy.  We didn't have lawyers, so it was just written up from the heart. I think it was well written too," he remarked.  I thought that people were becoming a little too anxious. You have to be flexible."

 ### Rise in the US Stock Market Following Trump's unexpected announcement, Wall Street saw a significant rebound.  The Dow Jones increased by approximately 2,500 points, resulting in a session gain of nearly 8%. This was the Nasdaq's highest day in 24 years, rising 12.2%. Meanwhile, the S&P 500 gained 6 percent, reaching 5,281.44 points.  Oil prices jumped more than 4 percent, and the US dollar also saw a boost.

 Impact on India

 The Indian stock market had suffered as a result of Trump's reciprocal tariff of 26% on Indian imports. But the new 90-day tariff pause is expected to give Indian markets a much-needed break, giving New Delhi more time to talk to the US about a deal. A spokesperson for India’s Ministry of External Affairs, Randhir Jaiswal, stated that discussions regarding reciprocal tariffs were ongoing between Indian and US trade teams, with the goal of reaching a swift conclusion to a mutually beneficial trade agreement.  "We hope these relations will continue to deepen," he added. "India and the United States are strong partners in trade, economic, and commercial relations." We are actively negotiating a bilateral trade agreement and aim to resolve these issues expeditiously."