The tariff pause won’t solve the crisis as President Trump’s 90-day suspension of some country-specific tariffs provides only temporary relief to markets. Despite the April 9 announcement, trade policy uncertainty, stock market volatility, and also the economic crisis of 2025 remain major concerns for businesses and consumers alike. At the time of writing, many analysts continue to express skepticism about the long-term effects of this pause.
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Tariff Pause, Trump Tariffs, And The 2025 Crisis Explained
Market Reaction to Partial Relief
Stock market volatility was quite evident when the S&P 500 dropped over 10 percent after Trump’s initial tariff announcement, but then rebounded following the pause. Goldman Sachs also withdrew its rather alarming 45 percent recession prediction.
Dominic Pappalardo, Morningstar Wealth’s chief multi-asset strategist, said:
“I believe these windows of optimism are what caused markets to rally so aggressively on today’s announcement.”
However, the tariff pause won’t solve crisis issues that continue to burden the economy and create uncertainty for businesses trying to plan ahead.
Ongoing Tariff Impact
Trump tariffs remain largely in place, with the 10% minimum rate still affecting all countries. For China, rates actually increased to 125%, plus an additional 20% linked to fentanyl. The economic crisis of 2025 continues as the pause only suspends rates above 10% for 59 territories until July.
Preston Caldwell, Morningstar’s chief US economist, stated:
“Uncertainty is what’s crushing the markets right now.”
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Global Economic Consequences
Trade policy uncertainty has increased the U.S. average tariffs to 24%, the highest in a century. Before the pause, projections reached about 27%. Trump tariffs and the resulting economic crisis of 2025 affect global markets, with China and the U.S. representing approximately 43% of the global economy according to IMF projections.
Impact on Trading Partners
The UK now faces the same tariff barriers as most countries. According to United Nations data, British steel and aluminum exports to America totaled $720 million in 2024, while the Global Trade Alert research group reports metal products exposed to these tariffs amounted to $2.9 billion.
The tariff pause won’t solve crisis concerns for the auto industry either, as the U.S. implemented a 25% import tariff on cars. The UK exported $9 billion of cars to the U.S. in 2024, about a quarter of its total car exports.
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Stock market volatility and trade policy uncertainty will likely extend the economic crisis of 2025. The tariff pause provides only temporary relief without addressing fundamental issues. Trump tariffs create an environment where businesses struggle with long-term planning, undermining market confidence when it’s needed most.