In what may be seen as a climbdown from initial stridency, US President Donald Trump has deferred, for 90 days, the punitive country-specific tariff imposed across nations, reverting to a universal 10% rate. At the same time, he has sharply escalated the tariff on Chinese goods to 145% from 104%, in retaliation to China’s move to raise duties on US goods to 125%. As a result, the average US import tariff has risen to 33%, higher than the initial estimate of 26%.Markets rallied on this moderation. US indices surged 10–13%, bond yields eased with the 10-year dropping to 4.25% from 4.50%, and the CBOE VIX slid to 35 from 60. Still, volatility remains elevated relative to long-term norms. Risk appetite also returned to global markets, with equity indices in Europe, Asia, and Latin America gaining 3–8%. Indian markets may echo some of this relief.Yet beyond the initial pop lies a deeper question: is this a genuine retreat or a tactical feint? Given Trump’s erratic policy cadence, the answer depends less on stated intent and more on inferred pressure points.
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