Tariff Turmoil: Trump's 90-Day Pause and China's 125% Tariff Shock!

Ladies and gentlemen, buckle up! The tariff whiplash continues as President Donald Trump announced a 90-day pause on most tariffs. Chad Smith reports that the situation has changed rapidly over the last seven days. The ten percent tariffs went into effect last weekend, and specific country tariffs, the higher ones, were supposed to go into effect on April 9th. But then, the President came on April 9th and said, well, we're going to do a 90-day pause. Right now, we're waiting to see what happens next, but the specific country, the very high tariffs, haven't gone into effect.

But here's the kicker: China, which actually saw an increase in tariffs. Dave Salmonsen, senior director of government affairs for the American Farm Bureau Federation, says, "Right now, we've got a 125 percent additional tariff on Chinese goods that would enter the U.S., and they had retaliated, and said, well, we're going to put up to an 84 percent tariff on U.S. goods going into China. We'll see what impacts that has going forward on all U.S. goods exported, but, of course, particularly our agricultural exports."

So, what does this mean for you? The next three months will be critical for negotiations. Salmonsen says, "But now is the time for discussion with a lot of the countries, whether they had the 10 percent additional or the much higher levels, the country-specific, will be engaging in discussions with the administration. See what kind of a deal they can work out in exchange for again reducing their tariffs, looking at some of their non-tariff trade barriers. In agriculture, of course, we're looking to standards."



But let's not forget, the market hates uncertainty! The on-off nature of Trump's tariff actions has brought criticism from both Democrats and Republicans. Sen. Rand Paul (R-Ky.) expressed concern about the effect on Taiwan and the broader economic impact, stating, "Jacking up the tariffs on China and going into an all-out trade war with China isn't good for our country, isn't good for Taiwan." The volatility in tariff policies can lead to market instability and uncertainty, which can deter investment and economic activity.

So, what's the bottom line? The 90-day pause on tariffs provides short-term relief and stability for the U.S. economy and its trading partners, particularly in sectors like agriculture and manufacturing. However, the long-term impact will depend on the outcome of trade negotiations and the duration and extent of the remaining tariffs. Continued uncertainty and high tariffs could lead to sustained inflationary pressures and slower economic growth, while successful negotiations could pave the way for long-term economic benefits and policy clarity.

Stay tuned to fb.org for the latest updates. Chad Smith, Washington.