Trump Halts Global Tariffs, Imposes 125% Rate Exclusively on China
U.S. President Donald Trump abruptly backed down Wednesday in his global trade war with a 90 day tariff pause for most countries -- but slapped even more levies against China in what has become a brutal duel between the world's two largest economies.
In the wake of worldwide financial market instability, shares on Wall Street experienced a significant uptick following President Trump's unexpected declaration made via his social media platform, Truth Social.
"I have authorized a 90 day PAUSE" on higher tariffs that took effect on Wednesday, Trump said, adding that he took the decision after more than 75 countries had reached out to negotiate and did not retaliate against the United States.
A uniform tariff rate of 10%, which came into effect on Saturday, will be maintained for all nations. This represents a significant shift from the frequently stringent duties that affected numerous close US partners.
However, Trump alleged that China was still "taking advantage" of his nation.
"In light of China’s disregard for global markets, I have decided to increase the tariff imposed on Chinese goods by the United States to 125% with immediate effect," stated Trump.
Earlier that day, Trump had increased the duties on Chinese products to an enormous 104%. In response, China raised its tariffs on American imports to 84%.
"At some point, ideally soon, China will recognize that the era of exploiting the U.S.A. and other nations must come to an end as it is neither sustainable nor tolerable," Trump stated.
U.S. Treasury Secretary Scott Bessent maintained that Trump had not changed course, stating: "This has been his plan from the start, and one could argue that he provoked China into an unfavorable stance."
'Be cool!'
Previously, the European Union initiated its own retaliatory action by announcing steps to target certain U.S. goods starting Tuesday, in response to American tariffs imposed on worldwide steel and aluminum shipments.
The 27-nation bloc, which Trump has accused of being created to "screw" the United States, will hit more than 20 billion euros' worth of U.S. products, including soybeans, motorcycles and beauty products.
But the EU notably did not retaliate against the separate 20% U.S. tariffs on all goods that came into effect a minute after midnight on Wednesday.
Trump announced a week ago on what he called "Liberation Day" that he would impose a 10% baseline tariff on all countries, taking effect Saturday.
Additional rates kicked in, starting Wednesday, for many individual economies including China and the EU, but also remote islands that barely trade with the United States -- and in one case an uninhabited territory near Antarctica.
Amid stock market panic, Trump earlier Wednesday urged Americans to "BE COOL!" and said that "Everything is going to work out well"
Wall Street stocks rocketed on Trump's pause announcement.
A few minutes later, the S&P 500 jumped by 6.0 percent to reach 5,281.44, ending a severe streak of declines from the previous week.
Earlier, European and Asian stock markets declined alongside oil prices and the dollar as tensions intensified during the standoff.
US bond yields had similarly increased during a significant downturn -- a crucial warning sign economically, since national government debt typically serves as a secure refuge for investors when markets become volatile.
'Kissing my ass'
Prior to his shift, Trump stated that world leaders were hastening to negotiate "customized" agreements with the United States, with Japan and South Korea being two of the countries dispatching delegations to Washington.
"What I’m saying is, these nations are basically asking for our support but they can forget about getting anything from me,” Trump said at a dinner with fellow Republicans on Tuesday evening.
But China doubled down.
The Chinese finance ministry stated, "The additional tariffs imposed by the U.S. on China merely compound one error with another."
Earlier this week, Bessent cautioned nations during a banking summit that siding with Beijing would amount to "severing their own air supply."
Trump believes his policy will revive America's lost manufacturing base by forcing companies to relocate to the United States.
The billionaire former property tycoon has particularly raged against China, accusing it of excess production and "dumping" inexpensive goods on other economies.
China advised travelers on Wednesday to "carefully evaluate the potential dangers" prior to visiting the United States.
Later, during his visit to Panama, U.S. Defense Secretary Pete Hegseth cautioned about Chinese “threats,” amid tensions surrounding the strategic position of the country’s canal, which has become a point of contention between Beijing and Washington.
