Updated April 10, 2025 at 12:50 PM ET
The past week has been a wild ride for businesses and markets, starting with President Trump's announcement of sweeping tariffs and ending with an abrupt pause on most of them.
About 12 hours after country-specific tariffs took effect on dozens of U.S. trading partners — and after days of insisting that he would hold the line — Trump said Wednesday afternoon that he would pause most of them for 90 days.
In a post on Truth Social, Trump said the reason was that "more than 75 countries have called Representatives of the United States … to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States."
Trump had maintained all week — and even on Wednesday morning — that the country-specific tariffs would not be halted, despite top investors' growing calls for him to do so. Even though the White House had insisted that tariffs weren't about negotiations, Trump told reporters later Wednesday that "a lot of times, it's not a negotiation until it is."
Trump also conceded that the declining markets were making people nervous, or as he put it, "yippy."
The pause on higher tariffs gives the White House three months to engage in negotiations with individual countries. Top administration officials are now saying this was Trump's strategy all along, as opposed to a reaction to days of sharp declines in the market.
"Many of you in the media clearly missed the art of the deal," White House press secretary Karoline Leavitt said, referring to the title of Trump's co-written 1987 book. "You clearly failed to see what President Trump is doing here."
While Wall Street and global markets have since breathed a sigh of relief, the trade war has left its mark — and still isn't completely resolved.
Trump doubled down on tariffs on China, raising them to a whopping 125% — effective immediately — because of what he called "the lack of respect that China has shown to the World's Markets." The White House clarified Thursday that China faces a tariff rate of 145%, which includes a preexisting 20% tax on goods.
Plus, the baseline tariff of 10% on all imported goods that took effect last week will remain in place, as will previously enacted 25% tariffs on steel, aluminum, cars and car parts.
Here's a look at how things are — and aren't — changing.
What's on hold
The country-specific tariffs Trump announced last week are on hold for 90 days, meaning they are now slated to take effect in early July.
Speaking to reporters on Wednesday, Trump defended his flip-flop as a sign of flexibility.
And he pointed to market turmoil, particularly in the bond market, as the basis for his decision, which he said "came together … fairly early this morning" after several days of consideration.
The pause, which was announced in the middle of the trading day, was embraced by Wall Street figures.
Bill Ackman, billionaire hedge fund manager and Trump supporter, went from criticizing Trump's approach to praising it on social media, calling the outcome "brilliant" and "the perfect setup for trade negotiations over the next 90 days."
"There are better and worse ways of handling our problems with unsustainable debt and imbalances, and President Trump's decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way," Bridgewater Associates founder Ray Dalio tweeted, adding he hopes the same will happen with China.
The pause also cheered U.S. markets, at least initially. On Wednesday, the Dow Jones Industrial Average surged close to 8%, the S&P 500 rose more than 9% and the Nasdaq rallied more than 12% — its largest one-day jump since 2001. But they all fell again on Thursday, a sign of continued uncertainty.
The European Union says it is also pausing its retaliatory tariffs against the U.S. for 90 days.
The 27-country bloc had said Wednesday that it would start collecting higher duties on U.S. imports on April 15 in response to the 25% tariffs on steel and aluminum that the Trump administration imposed in March.
The steel and aluminum tariffs — as well as a separate set of tariffs on car exports — are still in place. But after Trump's announcement dropped the "reciprocal" 20% tariffs on all other European goods to a baseline of 10%, the EU signaled its willingness to negotiate.
"If negotiations are not satisfactory, our countermeasures will kick in," European Commission President Ursula von der Leyen said Thursday.
What's in effect
Baseline tariffs of 10% remain in place on imports from all countries, which means prices are still going to be higher than they were a few months ago — and may be slow to come down even if the tariffs were to go away, economists warn.
Canada and Mexico are not being hit with a 10% tariff, as those two countries were excluded from Trump's list earlier this month. But many goods from those countries are still subject to tariffs, albeit fewer than Trump originally threatened.
In March, after a series of stops and starts, threats and delays, Trump imposed 25% tariffs on Mexican and Canadian goods, only to lift most of them two days later. As it stands, all goods covered by the United States-Mexico-Canada Agreement are exempt from tariffs.
Meanwhile, the trade war between China and the U.S. appears to be escalating.
"At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable," Trump wrote on social media after once again hiking the tariff on Chinese imports, this time to 125%.
China also increased its retaliatory tariffs against the U.S. on Wednesday, bringing the total rate to 84%. That came days after China's commerce ministry vowed to "fight till the end if the U.S. side is bent on going down the wrong path."
In a further escalation, the Chinese Film Administration — which is contractually committed to releasing a certain number of foreign films per year — said Thursday it would cut the number of U.S. movies shown in the country. It said the Trump administration's "erroneous practice of imposing excessive tariffs on China is likely to further diminish the Chinese audience's favourable perception of American films."
On Wednesday, Treasury Secretary Scott Bessent suggested Trump had intentionally "goaded China into a bad position."
"They responded, they have shown themselves to the world to be the bad actors," Bessent told reporters. "It wasn't a hard message: don't retaliate, things will turn out well."
What happens next
Now that most of the "reciprocal" tariffs have been paused, the Trump administration says it is time to focus on making individual deals with the countries that did not retaliate.
Bessent told reporters that Trump wants to be "personally involved" in those conversations.
"Each one of these is going to be a separate, bespoke negotiation," Bessent added.
Trump says his administration has already been approached by more than 75 countries interested in negotiating. While officials have not elaborated on specifics, leaders from dozens of countries in Asia, Europe and elsewhere have referenced such conversations publicly.
It's not clear what exactly those negotiations will involve. The White House messaging around tariffs has varied, with goals ranging from reducing the trade deficit to bringing back manufacturing jobs to boosting federal revenue.
Israeli Prime Minister Benjamin Netanyahu met with Trump about the tariffs in D.C. on Monday. Bessent and Trump announced Monday that the U.S. would open negotiations with Japan, which they said is sending a team of negotiators stateside for talks.
Trump also told reporters on Wednesday that he is open to meeting with Chinese President Xi Jinping, calling him a friend and "one of the smartest people in the world."
"Xi is a smart guy and we'll end up making a very good deal," Trump said. "We will get a phone call at some point and then it's off to the races."
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