Global Reactions to US Pause on Reciprocal Tariffs
Governments around the world have responded to United States President Donald Trump’s announcement of a 90-day pause on reciprocal tariffs, excluding China whose imports now face an increased tariff of 125 per cent.
Southeast Asia
ASEAN nations issued a joint statement following a special ASEAN Economic Ministers (AEM) meeting in Kuala Lumpur, stating that the grouping would not resort to retaliatory measures and instead welcomed the opportunity for dialogue. Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Abdul Aziz also welcomed the United States’ decision to pause higher tariffs for numerous trading partners, but acknowledged the uncertainty it creates for regional economies.
Europe
Germany viewed the pause as a sign that US policy was responding to pressure from the continent. Chancellor-in-waiting Friedrich Merz said that Germany would not benefit from a trade conflict and expressed hope for a longer-term solution, stating that achieving zero per cent tariffs in transatlantic trade would solve the problem.
Asia
Japan offered a cautious but positive response, with Chief Cabinet Secretary Yoshimasa Hayashi welcoming the move and expressing a desire to clarify the details. The announcement triggered a strong market response in Tokyo, with the Nikkei index surging over 8.0 per cent on Thursday morning.
South Korea
The government viewed the pause as a chance to re-engage in trade discussions, with a 10 per cent baseline tariff remaining in place. Indonesia welcomed the pause as a step toward restoring meaningful dialogue, while Vietnam took swift diplomatic action, agreeing to begin discussions with the United States on a potential trade agreement.
Conclusion
The 90-day pause offers a window for dialogue, but many observers remain cautious, noting that the broader uncertainty around US trade policy continues to cast a shadow over global markets. As the world waits to see what the future holds, one thing is clear: the global economy is watching with bated breath.
FAQs
Q: What is the purpose of the 90-day pause on reciprocal tariffs?
A: The pause is intended to provide an opportunity for dialogue and recalibration of the US trade stance.
Q: Which countries are excluded from the pause?
A: China, whose imports now face an increased tariff of 125 per cent, is excluded from the pause.
Q: How has the global market responded to the pause?
A: The Nikkei index surged over 8.0 per cent on Thursday morning in response to the US decision to suspend tariff hikes on its trading partners.
Q: What is the current state of trade relations between the US and its trading partners?
A: Trade relations remain uncertain, with many countries expressing concerns over the impact of US tariffs and retaliatory measures.