Trump Announces 90-Day Pause on Tariffs, Except for China

Retailers are feeling whiplash after President Donald Trump announced Wednesday he would not be moving forward — at least in the short term — with many of the additional tariffs he had promised would take effect this week.

The president took to the social media platform Truth Social to announce a 90-day pause on tariffs he was scheduled to impose on most countries, with the exception of China, which will now face tariffs of 125 percent, multiple news outlets reported. Trump said he was moving forward with tariffs on China because the country announced reciprocal tariffs on U.S. goods of 84 percent, taking effect Thursday.

"I thought that people were jumping a little bit out of line, they were getting yippy," Trump said when a reporter asked why he paused tariffs for 90 days during an unrelated press event in front of the White House on Wednesday. He said the pause was applied to "the people who didn't retaliate." Karoline Leavitt, the White House press secretary, said the tariff rate for most countries would be brought down to 10 percent, according to The New York Times.

"Nothing's over yet, but we have a tremendous amount of spirit from other countries, including China," Trump told reporters. "China wants to make a deal, they just don't know how quite to go about it."

Just hours before Trump's announcement, almost all member countries of the European Union voted in favor of proposals that would impose retaliatory tariffs on specific U.S. products sold into Europe starting next week, NPR reported.

Total Retail's Take: Trump's announcement calmed investors, economists, and retail leaders, as seen by the rise in the S&P 500 Wednesday after days of steep decline. However, experts and analysts are warning of more market volatility. Goldman Sachs rescinded its prediction of a recession shortly after Trump's announcement. The New York Times quoted KPMG Chief Economist Diane Swonk as saying, "This is nuts. Damage done. Market relief is a headfake, unless the administration makes a major course correction."

While many of the tariffs retailers feared are — at least for now — on the back burner, the 125 percent tariff on Chinese goods still has enormous repercussions for retailers whose supply chains are predominantly centered around China. During its investor event at the same time as Trump's announcement, Walmart CEO Doug McMillon was reacting live to the news, telling reporters and investors in the room that Walmart was "positioned to play offense" and acknowledged the situation as fluid, according to Fox Business.

Zilliant, which provides pricing lifecycle management services, found that 44 percent of U.S. businesses it surveyed planned to pass the increased costs as a result of tariffs onto customers. That survey, taken prior to Trump's announcement, could change now that the president has temporarily backed off on imposing additional tariffs, but as Zilliant's CEO said, retailers will continue to face difficult decisions on how to manage these changing cost structures.

Reuters reported Wednesday that many retailers have not yet placed their usual orders for Christmas decor from Chinese factories, at a time when companies would normally be preparing for the crucial holiday season. Additionally, Amazon.com is canceling orders for imported summer goods from China and other Asian countries, according to Bloomberg.

The 90-day pause gives retailers more time to make informed cost and sourcing decisions, assess the potential tariff impact on their businesses, re-evaluate their supply chains, and forecast worst-case scenarios as they sit in uncertainty.