The US president blinked first in an escalating tariff war, declaring last night that import duties imposed on countries that had not retaliated, will be paused for 90 days, giving an immediate boost to global stock markets.
The 90-day pause on higher tariffs will be suspended, but the 10% baseline rate will remain, while tariffs on China have been increased again to 125%.
There is a point at which the raising of import duties becomes redundant, said one analyst, as the price of many goods will be lower than the tax, while other prices will soar to levels that are no longer attractive to consumers.
Earlier in the week, China had retaliated with tariffs of 84% imposed on the US, while Europe set out a programme of three tariff hikes from 15 April, 15 May and the 1 December on annual imports totalling around US$20.9 billion.
