President Donald Trump announced a 90-day pause on higher tariffs for most countries on Apr. 9.

This decision follows the lack of retaliation from over 75 trading partners who sought dialogue with the US.

However, China is not included in this pause. Trump raised tariffs on Chinese goods to 125% immediately, citing China’s failure to respect global markets.

A 10% tariff remains in effect globally, while Canada and Mexico are exempt from certain goods under the US-Mexico-Canada Agreement.

Canadian energy and fertilizer products will face a 10% tariff, while non-exempt goods from these countries are subject to a 25% duty.

The White House did not disclose which nations are included in the pause. Other tariffs, including those on automobiles, steel, and aluminum, remain unchanged.

🔗 Source: NBC News

🧠 Food for thought

1️⃣ Historical lessons from past U.S. trade wars reveal consistent economic patterns

Trump’s tariff reversal comes amid market turbulence that echoes previous trade disputes in American history.

The most notorious example, the 1930 Smoot-Hawley Tariff Act, led to retaliatory measures that caused U.S. exports to plummet by 61% in just three years, deepening the Great Depression and contributing to President Hoover’s electoral defeat 1.

This pattern repeated in 2002 when President Bush imposed steel tariffs of 8-30%, triggering European retaliation and ultimately resulting in more job losses in steel-using industries than were protected in steel production 2.

Even the 1987 trade war with Japan, when President Reagan doubled import prices on Japanese electronics and cars, failed to accomplish its primary goal of reducing the U.S. trade deficit 2.

The current situation parallels these historical examples, with China’s 84% retaliatory tariffs 3 and the EU’s newly approved countermeasures 4 demonstrating how trade conflicts typically escalate before eventual de-escalation.

2️⃣ Tariff impacts are disproportionately distributed across economic sectors and households

Recent economic analyses reveal that Trump’s tariffs would have created uneven economic burdens, explaining the rapid market rebound after his partial reversal.