President Donald Trump announced on Thursday that he is prepared to reinstate reciprocal tariffs if countries do not agree to favorable trade deals. This warning comes as his administration ramps up negotiations with other nations following a temporary pause on reciprocal tariffs. While a 10% universal tariff rate for all imports remains in place, Trump indicated that the paused tariffs could be reimplemented if necessary. One exception to the pause is China, which faces a 125% reciprocal tariff, resulting in a total tariff rate of 145% when combined with existing tariffs. Trump also mentioned the possibility of adjusting the 10% baseline tariff through negotiations with certain countries based on trade deficits or surpluses. Despite ongoing negotiations with numerous countries, no agreements have been finalized yet. Trump’s decision to impose tariffs has sparked concerns about its impact on consumer prices and the economy, with economists warning of a potential recession. The situation sets the stage for a trade showdown with China, a key trading partner with whom the U.S. has been engaged in a tariff dispute. Trump emphasized the need to address trade imbalances and unfair practices, expressing a desire to reach a mutually beneficial agreement with China.
The daily tariff pause has financial implications.
When asked if Chinese President Xi Jinping has reached out to discuss trade policy, Trump did not provide a clear answer. “I don’t want to disclose who has reached out. I believe things will work out, hopefully,” he stated, expressing concerns about the impact on the country’s economic base. Speaking at a cabinet meeting with Secretary of State Marco Rubio and Secretary of Defense Pete Hegseth, Trump alluded to challenges ahead.
Trump’s 25% tariffs on steel, aluminum, and auto imports remain active, with plans for additional tariffs on pharmaceuticals. Existing tariffs on goods from Mexico and Canada are still enforced. Following a market surge and subsequent drop, Treasury Secretary Scott Bessent reassured the public about market fluctuations.
The administration aims for clarity on tariffs within 90 days as negotiations progress. Despite market movements, Trump remains focused on the long-term benefits of his tariff strategy.
