Wednesday, 07 May, 2025

Tariff Pause Brings Euphoria—and Uncertainty—to the U.S. Economy


Reading Time: 2 minutes

President Donald Trump’s decision today to implement a 90-day pause on most newly enacted tariffs—with China notably excluded—sent financial markets soaring. The S&P 500 jumped more than 7%, and oil prices climbed over 3% as investors briefly exhaled after weeks of economic tension. But behind the numbers lies a deeper anxiety: the pause may offer a short-term high, but it also feels like an anvil suspended over the U.S. economy, ready to fall at any moment.
The announcement effectively delays sweeping tariffs for much of the world, though it doubles down on Beijing with an immediate increase in tariffs on Chinese goods to 125%. In response, China retaliated with its own tariffs of 84% on U.S. imports. The European Union also approved 25% tariffs on $21 billion worth of American goods, including everything from beef to yachts. While the market reacted favorably today, the broader economic implications are anything but calm.
This 90-day reprieve creates a strange sense of euphoria in the short term—a feeling akin to watching a tornado approach but knowing it won’t hit for three months. Businesses that rely on global supply chains have a temporary lifeline. Importers can make quick orders before potential price hikes kick in. Exporters might try to squeeze in a few good months before international backlash hardens. But underneath the surface lies a gnawing sense of uncertainty: what happens after 90 days?
The pause functions as a tactical maneuver rather than a long-term strategy. The administration appears to be leveraging the threat of a full global tariff regime as a negotiating tool—dangling it like a sword over foreign governments and domestic companies alike. It’s a move that keeps the markets on edge, consumer prices unstable, and businesses reluctant to make long-term decisions.
The psychological impact on the economy cannot be overstated. While Wall Street celebrates, Main Street braces for potential consequences. Retailers, manufacturers, and farmers—already battered by earlier tariff cycles—now face the prospect of restarting or reworking supply chains, all while second-guessing what might come in July when the pause expires. Investment decisions may be postponed, hiring slowed, and expansion shelved as business leaders wait for the other shoe to drop.
This is where the “anvil effect” becomes most pronounced. The market may have rallied, but it did so not because of confidence in the future—rather, because of temporary relief from an expected blow. Once that 90-day clock runs out, either tariffs return in full force or global economic tensions explode further if countries like China and the EU choose to escalate. The EU’s immediate retaliatory tariffs are an ominous sign that even temporary pauses don’t mean forgiveness or forgetfulness from America’s trade partners.
The bottom line: the pause gives the illusion of calm, but it is not stability. It is a momentary silence in an ongoing economic storm. Unless this 90-day window is used to broker meaningful, lasting agreements with trade partners, the economy will return to crisis mode this summer—perhaps more fractured and fragile than before.
In that sense, today’s market celebration may be less a sign of strength and more a collective nervous laugh in the face of looming danger.

0 comments on “Tariff Pause Brings Euphoria—and Uncertainty—to the U.S. Economy

Leave a Reply

Your email address will not be published. Required fields are marked *

VIDEO: This Week’s Best of our Network

GDPR Compliance

DBJ does not collect data on its visitors.

USABR: Nationally Syndicated Radio Distribution

Contact

Contact  articles@usabusinessradio.net
for more information on articles on this site. bmuyco@usabusinessradio.net for all other information.

Kevin Price’s “New Rich” Book Ready for Pre-order for 99 cents!

The Price of Business Visits with Robert Kiyosaki on 20 Years of “Rich Dad Poor Dad”

The author of the best selling finance book of all time celebrates its 20th anniversary in a series of interviews with Kevin Price on the Price of Business.

Adventures in Quora with Kevin Price

Kevin Price, Editor at Large of Daily Business Journal and host of the nationally syndicated Price of Business show writes frequently at Quora about issues ranging from politics to personality types. His favorite answers are also found at USA Business Radio.

#METOO REHAB

The Best in News and Thoughtful Commentary

All the News. All the Time

PMWorld 360

Archives

NONE OF THE OPINIONS IN DAILY BUSINESS JOURNAL SHOULD BE CONSTRUED AS BEING THOSE OF DAILY BUSINESS JOURNAL

For more information regarding content, see the About page.

Recent Comments

    RSS
    Follow by Email
    YouTube
    YouTube
    LinkedIn
    LinkedIn
    Share