President Donald Trump has declared a 90-day suspension of reciprocal tariffs for over 75 countries while sharply escalating trade tensions with China by raising tariffs on Chinese goods to 125%.
This is after he raised tariffs on Chinese imports to 104% earlier this week, citing the retaliatory tariffs that the government of Ji Xinping implemented on US imports, following an earlier American tariff levy of 34%.
Last night’s breaking news follows days of global market turmoil triggered by earlier tariff announcements, with US stocks surging immediately after the announcement.
It heralded the first positive day for US stocks after the Trump Administration's 'reciprocal tariff' announcement on April 2, an announcement that caused cascading market losses, amounting to at least $6 trillion by last Friday.
On Wednesday night, Trump justified the 125% tariff hike, effective immediately, by citing China’s “lack of respect” for global markets.
This follows China’s retaliation with an 84% tariff on US imports after its initial 34% tariff response to the US.
Trump said nations that refrained from retaliating against US tariffs would face a 10% reduced reciprocal tariff during negotiations.
The EU, Canada, Mexico and others are included, though steel, aluminium and auto tariffs remain unchanged.
The latest development led to US stocks rallying sharply, with the Dow Jones surging over 1 800 points and the S&P 500 climbing 7%.
The policy shift aims to leverage ongoing negotiations with over 75 countries, as Treasury Secretary Scott Bessent stated that Trump sought “personal involvement” in talks.
However, the US-China stand-off intensified after Beijing vowed to “fight to the end” against tariffs.
Earlier retaliatory measures by the EU and China had contributed to trillions in global market losses.
Trump wrote on his personal website, Truth Social: “At some point, hopefully in the near future, China will realize that the days of ripping off the USA, and other countries, is no longer sustainable.”
Commerce secretary Howard Lutnick said there was global willingness to collaborate on trade reforms, contrasting China’s stance.
The 10% baseline tariff will persist during the 90-day window, with sector-specific duties on pharmaceuticals and lumber still under review.
Analysts caution that unresolved US-China tensions could prolong market volatility. – Sources: CBS News, BBC, NBC News, Yahoo Finance, The Hill.
