Trump Tariff Pause: 10% baseline tariff remains in place for all, including India — Here’s what it means

In a post on Truth Social, Trump said, “Based on the fact that more than 75 countries have called representatives of the US to negotiate a solution and that these countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorised a 90 day pause, and a substantially lowered reciprocal tariff during this period, of 10%, also effective immediately”.

Here is an explainer on what Trump’s latest announcement means for global markets

DO ALL RECIPROCAL TARIFFS GET PAUSED?

The reciprocal tariffs are paused for 90 days for all nations, except for China. However, a baseline tariff of 10% that went into effect on April 5, remains in place on everyone.

WHAT DOES THIS MEAN FOR INDIA?

India is the only country which has been negotiating a trade deal with US since the start of the Trump administration. The latest announcement from Trump, implies that the 26% reciprocal tariffs on India also get paused. However, the 10% baseline tariff that came into effect for all nations on April 5, remains in place.

WHAT DOES THIS MEAN FOR CHINA?

Considering China’s retaliation to the reciprocal tariff, the White House has increased the tariff rate on the People’s Republic of China (PRC) to a total of 125%

WHAT DOES THIS MEAN FOR THE EU?

Because the European Union retaliatory tariffs have not gone into effect yet, the EU’s reciprocal tariff rate of 20% is also being paused. The EU is only going to face the 10% baseline tariff that went into effect on April 5.

WHAT DOES THIS MEAN FOR CANADA AND MEXICO?

Fentanyl tariffs on Canada and Mexico remain unchanged. USMCA trade is tariff-free; non-USMCA trade is tariffed at 25%, except for energy and potash, which are tariffed at 10%. The baseline of 10% did not go into effect in Canada and Mexico on April 5, and neither country is getting the 10% baseline now.

WHAT HAPPENS TO STEEL, ALUMINIUM AND AUTO TARIFFS?

Section 232 tariffs on steel, aluminum and the automobile sector remain unchanged. There is no change in the application of 25% tariffs on imports of steel, aluminium and automobiles into the US.

WHAT ABOUT SECTORAL CARVE-OUTS?

Trump had exempted pharmaceuticals, semiconductors, and critical minerals from reciprocal tariffs. These carve-outs will continue till the White House announces a policy change. Trump has warned that the US will apply tariffs to the pharma industry.