What Trump's 90-day tariff pause means for your wallet
Bailey Schulz and Jessica Guynn, USA TODAY
6 min read
President Donald Trump is urging everyone to keep their cool. But the rollercoaster tariff war is rattling nerves from coast to coast as Americans nervously watch their stock portfolios and 401(k) accounts yo-yo with the wild gyrations of the financial markets.
Economists say consumers have good reason to worry.
At midnight Eastern time April 9, the White House imposed double-digit rates on dozens of countries. Hours later, Trump reversed course, lowering tariffs on goods from dozens of countries to 10% for 90 days. The reprieve from global tariffs sparked a historic surge on Wall Street, but uncertainty remains on Main Street.
"The changes in tariff policy created as many questions as they did answers," Bill Adams, chief economist for Comerica Bank, told USA TODAY.
The changes also escalated the trade war with China. Trump increased tariffs on Chinese goods to 145% – a 125% boost on top of the earlier 20% levied – on April 9, citing “the lack of respect China has shown to the World’s Markets.”
China responded April 11 by raising tariffs on U.S. imports to 125%. Trump also said he would move forward with other tariffs on pharmaceutical drugs and foreign steel.
So what do the latest developments mean for your wallet?
‘Yippy’: Why did Trump pause tariffs?
Trump and his top economic advisers said they paused the tariffs after more than 75 countries approached the United States ready to negotiate. But he also told reporters that the turbulence in the markets played a role.
"I thought that people were jumping a little bit out of line," Trump said. “They were getting yippy, you know. They were getting a little bit yippy, a little bit afraid."
But trade deals will not happen right away, Commerce Secretary Howard Lutnick told Fox News. “The real deals will take some time,” Lutnick said Wednesday.
What does the tariff pause mean for you?
In the meantime, American consumers should brace for “more bad days in the stock market” and a “massive” increase in prices, not to mention the possibility of a recession, said Mark Zandi, chief economist for financial services company Moody's Analytics.
“I wouldn’t take any solace in the president’s reversal of the reciprocal tariffs,” Zandi told USA TODAY. With a higher tariff on Chinese goods, "the effective tariff across all countries and goods didn’t change appreciably. It is still above 20% and will result in big price increases for everything from clothing to cars to cell phones.”
Though Trump has said foreign countries foot the bill, it's the importers ‒ often U.S. companies ‒ that pay these taxes. Companies tend to pass on at least part of those higher costs to consumers, which is why economists say tariffs can be inflationary.
The money from tariffs goes to the Treasury Department. Economists say much of the cost of tariffs during Trump’s first term was passed on to consumers.
Why does Trump want tariffs?
Trump has said he views tariffs as a tool to boost manufacturing in the United States and bring in "billions of dollars, even trillions of dollars” in revenue, going so far as to float the idea of replacing the income tax with tariffs.
"We're going to start being very wealthy again," he said.
Trump has also said tariffs can be used as a negotiation tactic with other countries or to punish those he views as uncooperative.
How much money could tariffs bring in?
Before the 90-day pause was announced, Peter Navarro, Trump’s senior counselor for trade and manufacturing, said tariffs were expected to raise $6 trillion over the next 10 years. Other estimates have been more conservative; the Yale Budget Lab said 2025 tariffs could bring in about $3 trillion between 2026 and 2035.
If the trade war increases the cost of goods, consumers could find themselves pulling back on spending, which makes up about 70% of the economy. Companies in turn could slow their imports, which would mean less revenue from tariffs for the government.
Using tariffs as a negotiation tactic also could reduce revenue if the U.S. agrees to scale back tariffs against its trade partners.
Which tariffs are still in effect?
After the announcement of the 90-day pause, tariffs now in place include:
A universal 10% tariff against all trading partners outside of Canada and Mexico.
A 25% tariff on steel and aluminum.
A 25% tariff on imported vehicles and certain auto parts.
Canada tariffs: 25% on most goods that don't comply with the United States-Mexico-Canada Agreement.
Mexico tariffs: 25% on most goods that don't comply with the United States-Mexico-Canada Agreement.
The European Union, China and Canada have announced retaliatory tariffs.
How much would a trade war with China cost you?
A U.S.-China trade war could have huge consequences for American consumers, jacking up prices on everything from groceries to cars to iPhones after years of punishing inflation.
From smartphones to computers and from toys to Christmas decorations, China is the country’s top supplier, accounting for 16.5% of the $3.2 trillion worth of imports brought into the United States in 2022, according to the Office of the U.S. Trade Representative.
“The tariff mix is actually worse,” Bloomberg LP’s chief economist Anna Wong said on the social media platform X Wednesday evening, noting that increasing tariffs against China at 125% "will boost the hit to consumption goods."
April 10, the White House clarified that the tariff on Chinese goods has been raised to a total 145% when factoring in previously imposed 20% tariffs on Chinese goods imposed in February.
Trump said April 9 that he did not think he would need to raise tariffs again and that Xi Jinping, China’s president, wants to make a deal.
“I can’t imagine it,” he said in the Oval Office. “I don’t think I’ll have to do it.”
Beijing has stockpiled “a new arsenal of tools that’s intended to minimize the cost to China and maximize the pain on the US,” Evan Medeiros, a former senior national security official in the Obama administration and now a professor at Georgetown University, told The Wall Street Journal.
China's commerce ministry said the threat to raise tariffs was “a mistake on top of a mistake” and that “China will never accept it.”
How is the stock market reacting to tariffs?
The U.S. stock market saw dramatic swings on the heels of Trump’s April 2 tariff announcement as investors worried that tariffs could push the U.S. into a recession.
The S&P 500 temporarily dipped low enough to enter bear market territory – at least a 20% fall from a recent peak – before rebounding. Stocks rallied after Trump announced the 90-day pause.
How would tariffs affect prices?
A Yale Budget Lab analysis said apparel prices could jump 33%. Food prices could rise 4.5%, roughly triple recent grocery inflation.
Trump's 90-day tariff pause excludes the 25% tariff on imported cars and car parts. New auto tariffs would raise vehicle prices 13.5% on average, the analysis found.
(This story has been updated to add new information.)
