Trump pauses ‘reciprocal’ tariffs. What it means for Michigan
- President Trump announced a 90-day pause on most reciprocal tariffs while trade negotiations continue
- Chinese exports now face 125% tariffs following the country’s retaliatory actions
- 10% universal tariffs, 25% tariffs on autos and existing arrangements with Canada and Mexico remain in place
President Donald Trump backed off the harshest of his international tariffs Wednesday afternoon, issuing a 90-day “pause” on most so-called reciprocal tariffs while the US negotiates trade policies with foreign nations.
Instead, imported goods from most countries will be subject to a blanket 10% tariff. But Chinese products will be subject to increased 125% tariffs after the country retaliated with 84% tariffs on US products, Trump announced in a surprise post on his Truth Social website.
Trump told reporters Wednesday afternoon that he changed course in part because “people were jumping a little bit out of line…they were getting a little bit yippy, a little bit afraid.”\
What does it mean for Michigan? Here’s what we know so far.
What Trump announced
In his social media announcement, Trump wrote that he authorized a 90-day pause on the higher reciprocal tariffs he’d proposed against Japan, the European Union and dozens of other nations.
Trump also raised tariffs charged to Chinese imports to 125% due to what he referred to as a “lack of respect.”
Stock markets up
Stock markets had slumped in the aftermath of Trump’s tariff announcements last week, with sharp drops cutting into 401k retirement accounts and other investments held by Michiganders and other Americans.
Related:
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- Trump tariffs jolt Michigan: businesses eye cuts; shoppers tighten belts
- Tariff timeline: Trump’s trade actions and how they impact Michigan
- Trump announces sweeping new tariffs: What they mean for Michigan
- Trump announces new auto tariffs; what it means for Michigan
The trajectory immediately shifted after Trump’s pause, with the S&P 500 rising more than 9% and the Dow Jones Industrial Average up by 7.87%.
Treasury Secretary Scott Bessent told reporters at the White House that recent stock market trends did not preempt the move, but rather the response from other countries “who want to come and negotiate in good faith.”
What tariffs remain in place
The pause does not extend to the near-universal 10% taxes on goods from other countries that began Saturday or industry-specific tariffs, including steel, aluminum and 25% tariffs on finished vehicles and key parts.
Those tariffs extend to all finished light vehicle imports coming into the US. Automobile parts such as engines, transmissions, powertrain parts and electrical components are also subject to tariffs.
In Michigan, where auto industry supply chains blur borders, the stakes are high. Roughly $77 billion in goods cross the Canadian border each year, and the state trades another $69 billion with Mexico.
MichAuto Executive Director Glenn Stevens, Jr. said in a statement that the state’s dominant industry “will continue to endure the uncertainty and disruption of these fluctuating trade policies.”
What about Canada and Mexico?
Trump’s announcement initially sowed confusion over whether Canada and Mexico — subject to a separate set of tariffs on steel, aluminum, certain auto parts and goods not covered by an existing trade agreement — would be subject to additional 10% tariffs.
White House officials later clarified that the new developments don’t change the status quo for Canadian and Mexican imports, CBC reported. That means separate tariffs on Michigan’s largest trade partners remain in place.
What happens now
Bessent said Wednesday that negotiations will continue with US trading partners in the coming weeks.
“Each one of these solutions is going to be bespoke,” he told reporters of the more than 75 countries Trump said are willing to negotiate. “It is going to take some time, and President Trump wants to be personally involved, so that's why we're getting the 90 day pause.”
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