Trump Pauses Tariffs for Most Nations, Escalates Trade War with China
Donald Trump has announced a 90-day pause on his highest “reciprocal” tariffs for most countries while simultaneously intensifying trade tensions with China by imposing a steep tariff hike.
In what marks a notable retreat, Trump said he would delay applying his highest tariffs to countries that have not retaliated against the U.S. However, he sharply increased tariffs on Chinese imports to 125%, effective immediately.
Posting on his Truth Social platform, Trump wrote:
“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 added that over 75 countries are currently seeking trade deals with the U.S., and to facilitate negotiations, he had “authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
The move follows calls from influential voices like Wall Street billionaire Bill Ackman, a Trump supporter, who recently urged the President to implement a 90-day trade timeout to avoid what he described as a “self-induced, economic nuclear winter.”
Karl Schamotta, chief market strategist at Corpay, noted: “After markets successfully put the administration on notice, the announced ‘pause’ seems likely to be extended beyond 90 days.”
Trump’s announcement sparked a market rally. The S&P 500 surged as much as 8.3%, while the tech-heavy Nasdaq jumped up to 11%.
Just hours earlier, Trump had encouraged investors to buy in:
“THIS IS A GREAT TIME TO BUY!!!” he wrote on Truth Social. “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”
The announcement came amid rising tensions between Washington and Beijing. In response to Trump’s move, China retaliated by raising tariffs on U.S. imports from 34% to 84%, shortly after Trump’s punitive 104% tariffs on Chinese goods took effect earlier in the day.
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