Trump’s 90-day tariff freeze: From global suspension to confrontation with China.
Trump recently escalated his trade policies by imposing heavy tariffs on imports from China, which increased by 145 percent, while tariffs were suspended for 90 days for more than 75 other countries, including the European Union.
The US tariffs on China, which were met with a 125 percent tariff response from Beijing, were much higher than those imposed by other countries. For example, the European Union faced a tariff of 20 percent, while Southeast Asian countries such as Vietnam and Cambodia faced tariffs of between 46 and 49 percent. This difference in tariffs reflects the US’s special focus on China.
While the high tariffs were imposed on China, other countries had the opportunity to negotiate with the US, and some were able to mitigate the negative effects of the tariffs on their economies. Therefore, the 90-day suspension of tariffs provided an opportunity for several countries and other actors, especially the European Union, to review and reconsider their trade relations with the United States.
Reasons for the three-month suspension of tariffs, excluding China
Looking at global developments, especially in the financial and trade spheres, as well as the tangible consequences of Trump’s tariff war on the United States, five main reasons can be considered for this 90-day suspension of tariffs;
1. Reducing financial market volatility and preventing an economic recession
After the initial announcement of the extensive tariffs by the Trump administration, US financial markets reacted strongly negatively. The S&P 500 index fell by more than 10% in two consecutive days and entered a bear market. During the same period, the Dow Jones index lost more than 4,000 points, experiencing the largest two-day decline in its history. The index continues to fall, with the first day of the week (Monday, April 21) down 2.36 percent. The Nasdaq also entered a bear market with an 11 percent drop. The index continues to fall, with the first day of the week down 2.55 percent.
In total, global markets lost more than $10 trillion in value. The VIX, a measure of market volatility, reached its highest level since the 2008 financial crisis, reflecting investor concern and a loss of confidence in the U.S. financial markets.
Major banks such as Bank of America and TD Cowen have also cut their growth forecasts and raised concerns about a recession. These banks have reported a decline in investments and increased economic risks and have emphasized the need to review trade policies.
On the other hand, the value of the US dollar has decreased against major world currencies and US government bonds have faced a decrease in demand, indicating a decrease in investor confidence in the country’s economic policies. Forecasts indicate that the probability of an economic recession in the United States has increased to 45%, and economists warn that the continuation of this trend could lead to a deeper recession.
Therefore, Trump’s main goal of this suspension was to create psychological stability in the market and send a signal of confidence to investors. In its official statement, the Trump administration announced that this measure would be “an opportunity to assess the global response and reset the course of trade negotiations.” Many analysts considered the suspension a “temporary pause” and believe that structural tensions in global trade persist.
2. Creating an Opportunity for Trade Talks with Allies
The announcement of a 90-day suspension of U.S. trade tariffs has given U.S. allies a good opportunity to initiate or intensify trade talks with Washington. The suspension applies to most countries except China and is intended to create space for negotiations to reset trade relations.
More than 75 countries and actors, including the European Union, Japan, the United Kingdom, and Mexico, have expressed their willingness to negotiate with the United States. Currently, 15 countries are actively negotiating with Washington. These negotiations include issues such as tariff reductions, increased imports of American goods, and greater access to their domestic markets.
For example, U.S. Vice President J.D. Vance met with Prime Minister Narendra Modi during his recent visit to India to discuss trade and defense agreements. The two countries aim to increase bilateral trade to $500 billion by 2030. In Europe, EU leaders are using the suspension as an opportunity to reach new trade agreements. In particular, proposals have been made to reduce industrial tariffs between the two sides.
3. Focus on curbing China’s economic influence
The increase in US tariffs on goods imported from China to an unprecedented 145% in April 2025 demonstrates a calculated strategy by the Trump administration to put pressure on the world’s second-largest economy. Unlike other countries that were subject to a 90-day suspension of tariffs, China was the only country that not only did not benefit from the suspension but also faced an escalation of tariff policies. This is a sign of the intensification of Washington’s strategic competition with Beijing in the areas of technology, trade, security, and global supply chains.