WASHINGTON: US President Donald Trump on Wednesday announced a 90-day pause on several newly imposed tariffs, while simultaneously increasing duties on Chinese imports to a staggering 125%. The move comes amid intense global economic turbulence, prompting a swift and positive reaction from Wall Street.
"I have authorised a 90-day PAUSE on higher tariffs that took effect on Wednesday," Trump posted on his Truth Social network. He added that the decision was influenced by outreach from over 75 countries seeking to negotiate trade deals without retaliating against the US.
Only the flat 10% tariff on all countries, introduced on Saturday, remains in effect for now. This marks a significant shift from Trump's previously aggressive tariff stance, which included steep levies on even America's closest allies.
Despite the partial pause, Trump sharply escalated tensions with China, accusing Beijing of ongoing unfair trade practices. “Based on the lack of respect that China has shown to the World's Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” he declared.
Just hours before, Trump had already raised duties on Chinese goods to 104%. In retaliation, China hiked its tariffs on US imports to 84%. “At some point, hopefully in the near future, China will realise that the days of ripping off the USA and other countries is no longer sustainable,” Trump added.
Markets, which had been roiled in recent days by the escalating trade war, rebounded sharply following Trump’s announcement. The S&P 500 surged 6.0% to 5,281.44, snapping a week-long slump. However, prior to the news, global stock markets, oil prices, and the dollar had all plummeted, with US bond yields rising amid a sell-off as investors fled to safer assets.
The European Union also weighed in, announcing retaliatory tariffs on US products worth over 20 billion euros, including soybeans, motorcycles, and beauty products. Still, the EU chose not to respond to the new 20% US tariffs enacted at midnight Wednesday.
A week ago, Trump had proclaimed "Liberation Day," introducing a baseline 10% tariff on all imports, with additional tariffs targeting trade surplus nations like China and the EU.
Despite the rising tensions, Trump insisted that global leaders were “rushing to negotiate” tailored trade deals with Washington. “These countries are calling us up,” he claimed, noting that Japan and South Korea had already sent delegations.
Meanwhile, China condemned the US’s tariff escalation, and its finance ministry warned the move was a major misstep. The Chinese government also advised its citizens to assess risks before traveling to the US, as diplomatic and economic frictions deepen.
