President Donald Trump on Wednesday abruptly backed down on his tariffs on most nations for 90 days, but raised his tax rate on Chinese imports to 125%.
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Scott Bessent discusses pausing tariffs apart from China
Facing a global market meltdown, President Donald Trump on Wednesday abruptly backed down on his tariffs on most nations for 90 days, but raised his tax rate on Chinese imports to 125%.
It was seemingly an attempt to narrow what had been an unprecedented trade war between the U.S. and most of the world to one between the U.S. and China. Global markets surged on the development, but the precise details of Trump’s plans to ease tariffs on non-China trade partners were not immediately clear. Donald Trump wrote on his Truth Social: “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.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”
Financial markets soared following the announcement on the 90-day pause with the NASDAW index rising up 9 per cent and the S&P 500 index up by 8 per cent.
Commerce Secretary Howard Lutnick said in an X/Twitter post that both he and Treasury Secretary Scott Bessent had sat with Mr Trump as he wrote the announcement on Truth Social. He added: “Scott Bessent and I sat with the President while he wrote one of the most extraordinary Truth posts of his Presidency. The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction.”
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Stock markets plunged last week for consecutive days following Mr Trump’s tariff announcement. In a bizarre move, Mr trump launched tariffs on friend and foe alike, even hitting territories with no permanent population with staggering tariffs.
He announced the move was to bring back manufacturing jobs to the US and would address trade imbalances with other nations. But his critics said the move would lead to higher prices across the board for American consumers as well as taking away resources for the focus on industries of the future, such as AI.
