Trump's 90-Day Tariff Suspension Sparking Market Relief but Global Trade Uncertainty Remains
In a dramatic and unexpected move, US President Donald Trump announced a 90-day suspension on raising tariffs for most trading partners while escalating tariffs on Chinese imports to a staggering 125%. This decision has sparked a robust rebound in financial markets, offering investors temporary relief. However, industry experts caution that the alarm has not been cleared, emphasizing the importance of continuing efforts to diversify supply chains. Of course, besides building factories to produce as Trump directed, America's trading partners can diversify their exports to mitigate U.S. protectionism risks.
Before Trump’s announcement to suspend higher tariffs on goods from countries other than China, the yield on the 10-year U.S. Treasury Bond surged to 4.5% amid heavy selling pressure—a clear signal that investors were losing confidence in U.S. bonds as safe-haven assets. Experts believe that had Trump not intervened, a financial fiasco could have unfolded, severely undermining America’s economic strength and the dollar’s global dominance.
On April 10, the market resumed falling — S&P 500 drops 3.46%, the Nasdaq fell 4.31%, and the 10-year Treasury Bond yield rebounded to 4.6%.
Since the Treasury Bonds are the debt of the United States owed to investors, an increase in the yield means an increase in the interest burden.
Stock Market Sell-Off Rivals Historic Crashes
Ironically, Trump declared April 2 as “Liberation Day,” a term that eerily mirrors a popular Chinese saying used to describe stock market crashes: "Thirty years of reform and opening up undone overnight—back to pre-liberation days (改革開放30年, 一夕回到解放前)." Since Trump announced reciprocal tariffs on April 2, $6.6 trillion was wiped out from U.S. stocks in just two trading days. Despite Trump's attempts to calm markets by claiming that “medicine is needed,” this wave of sell-offs represents one of the fastest and most severe declines in history, comparable to crashes during the early days of the COVID-19 pandemic in 2020 and the 2008 financial crisis. The S&P 500 is now nearing bear market territory as investor sentiment shifts rapidly from correction to panic.
More than $11 trillion has evaporated from U.S. stock markets since January 17—the Friday before President Trump began his second term—according to Dow Jones Market Data.
Economists Warn of Long-Term Damage
As Trump announced a temporary suspension of tariffs for negotiation purposes, European Union officials followed suit with similar measures to “give negotiation a chance.” Simon Evenett, professor of geopolitics and strategy at IMD Business School, pointed out that interim tariffs during this period will be set at an additional 10%, rather than the higher reciprocal rate announced by Trump on April 2. However, Evenett noted that even this uniform 10% tariff exceeds average rates imposed under the Smoot-Hawley Tariff Act of 1930—a policy widely regarded as exacerbating the Great Depression.
Evenett believes this pause may be extended but warns that trade policy uncertainty remains elevated. He predicts far-reaching consequences for global trade, including hard decoupling between China and America.
Chang-tai Hsieh, an economics professor at the University of Chicago Booth School of Business, criticized Trump’s tariff formula in his column for Taiwan’s CommonWealth Magazine. He argued that these tariffs would inflict significant economic damage not only on trading partners but also on the U.S. economy itself. “If the downturn in the stock market continues and prices start to rise in the U.S., the U.S. will likely seek to cut deals to remove the bite of the tariff,” Hsieh wrote.
Credibility Crisis: Can Businesses Trust Washington?
Fang-yu Chen, assistant professor at Taiwan’s Soochow University, argued that Trump's abrupt policy shifts have already damaged U.S. credibility and created economic uncertainty likely to deter investments. Nobunaga Chai, a senior semiconductor analyst, expressed skepticism about celebrating Trump’s reversal: “If a decision like a 90-day pause can be made so frivolously, who knows what other requests Trump will throw out during this period?”
Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC) has found itself embroiled in controversy after voluntarily disclosing that one of its chips made for a customer ended up in Huawei processors—a potential violation of export control regulations. Industry experts have questioned rumors suggesting TSMC could face fines exceeding $1 billion before any legal due process has been completed. “Who’s to say the fine is $1 billion when the due process has not ended? It normally takes years, and TSMC can appeal,” rebuffed a senior industry expert.
Kim Mi-yong, a retired officer from the Bureau of Industry and Security (BIS) and currently an adjunct professor at Taiwan’s National Cheng-Chi University (NCCU), clarified in a panel hosted by the Research Institute for Democracy, Society, and Emerging Technology (DSET) in Taipei that administrative penalties often involve reductions or alternative measures if violations are deemed inadvertent or qualify for voluntary self-disclosure programs. She contrasted this situation with harsher penalties imposed on China’s ZTE Corporation due to criminal offenses.
Amid these uncertainties, companies like Apple are scrambling to adapt by chartering cargo flights to ship products from overseas production facilities back to America ahead of potential tariff hikes. Reuters reported that Apple transported 600 tons of iPhones—approximately 1.5 million units—from India on April 10 alone to minimize costs associated with tariffs.
An ICT supply chain expert commented on this chaotic environment: “Since these tariffs are targeted at national levels, most of the companies can’t do much but wait for negotiations between the U.S. government and their host country governments.”
Kim advises Taiwan to cooperate with other allies and negotiate a better deal as a group instead of negotiating with the Trump Administration alone.
The Biggest Risk Ahead: Political Problems
Ben Chen, a board member of TSMC Foundation, summarized TSMC's challenges succinctly when asked about risks ahead: “In the future, there will be many issues related to technology and talent. But if by challenge you mean risk, then the biggest risk ahead lies in political problems in your country—Washington—as well as political issues within Taiwan.”
William Duhamel, founding principal of Route One Investment, remarked at a Policy Forum at Stanford University last October: “If anything, what’s going to hurt the U.S. is the U.S.”
As markets cling to the fragile hope of a negotiated resolution, the true cost of Trump’s tariff gambit becomes clear: a world where supply chains are redrawn in haste, alliances are tested by unpredictability, and the rules of global trade are rewritten by political brinkmanship. While the 90-day pause offers temporary reprieve, it underscores a deeper crisis—the erosion of trust in America’s economic stewardship. For companies like TSMC and Apple, the path forward is fraught with political landmines, not market fundamentals. As Ben Chen’s warning echoes—“the biggest risk lies in Washington”—the question remains: Can the U.S. repair its credibility before the next shock arrives, or will the world’s economic architecture fracture beyond repair?