Tariff Backpedal: What Trump’s 90-Day Pause Means for Australian Businesses

The world’s markets breathed a collective sigh of relief this week, as President Donald Trump announced a 90-day suspension on tariffs for countries that have not retaliated against the U.S. in ongoing trade disputes. While welcomed by investors, the move marks more than just a policy tweak — it’s the beginning of what analysts are calling “the great tariff backpedal.”

Nigel Green, CEO of global financial advisory giant deVere Group, says this shift is a clear sign that “economic gravity always wins — and political bluster has its limits.” His comments come just days after warning that trade tensions had reached unsustainable levels.

A Market Surge, But With Conditions

The market response was instant. The S&P 500 jumped 6% and the Nasdaq surged nearly 8%, suggesting a powerful relief rally after months of trade-related turbulence. Yields on 10-year U.S. Treasuries edged up to 4.37%, indicating that while optimism returned, caution still lingers.

“Markets are prepared to reward sanity — instantly and emphatically,” says Green. “But they will just as quickly punish any signs that this pause is merely a temporary political stunt.”

Why This Matters for Global Trade

The pause, while targeted at non-retaliating nations, is a tacit admission that the tariff-first strategy has backfired. The trade wars sparked by the Trump administration over the past year have not delivered the quick wins promised. Instead, they drove up global inflation, disrupted supply chains, suppressed investment, and rattled economic confidence.

While tariffs remain in place for countries like China — which continues to face increased levies — the 90-day suspension may signal a more pragmatic tone emerging in Washington, under pressure from both markets and allies.

But the global economy is not yet out of the woods. The two largest economies, the U.S. and China, are still locked in an escalating trade conflict, which will likely reshape supply chains and could permanently alter how trade flows through Asia-Pacific and beyond.

Implications for Australia

For Australia, the impact is multi-layered. As a middle power deeply integrated into Asia-Pacific trade, Australia has faced growing economic headwinds as global supply chains shifted and uncertainty around tariffs slowed business confidence.

• Australian exports to China, worth over $180 billion annually, could face indirect strain as Beijing and Washington lock horns.

• A prolonged U.S.-China dispute threatens to depress regional growth, weighing on commodity demand, particularly for iron ore and LNG, two of Australia’s largest exports.

• On the flip side, Australia may benefit from diverted investment and trade, as global firms seek to “de-risk” from U.S.-China tensions by relocating supply chains to stable markets.

According to a recent ANZ report, 41% of Australian mid-sized manufacturers are actively exploring alternative markets and supply routes in response to trade instability. If tariff relief leads to a genuine de-escalation, it could help restore confidence in the region’s manufacturing and export outlook.

But as Green warns, “Recovery will take more than a 90-day patch. It will take a full strategic reset.”

The Bigger Picture: Currency Credibility and Investor Confidence

Beyond trade, the move raises broader questions about the U.S. dollar’s standing as a global safe haven. Repeated policy flip-flops have already eroded some trust in Washington’s ability to provide steady economic leadership.

“Every erratic policy move chips away at confidence in the dollar’s future,” Green notes. For investors, particularly in Australia where the AUD remains sensitive to global sentiment, this creates a more volatile currency environment.

Australia’s superannuation funds, institutional investors, and exporters all face a world where the rules of trade are increasingly politicised, and where even temporary policy shifts carry outsized consequences.

What Comes Next?

The 90-day reprieve is a start, but global markets will need more than a press release to believe in long-term stability. As the U.S. maintains higher tariffs on Chinese goods — and with Beijing signalling it’s fully prepared for a protracted economic standoff — volatility is unlikely to disappear any time soon.

Investors and Australian businesses alike must prepare for a world where supply chains, capital flows, and trade relationships continue to shift, possibly for years to come.

As Green puts it: “This is just the first crack. If Washington fails to fully deliver, this temporary optimism could fade as quickly as it flared.”

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