US President Donald Trump announced Wednesday that he is applying a 90-day pause on new tariffs as his trade war continues to ripple across the global economy.
At the same time, Trump revealed he is raising tariffs on Chinese goods to 125 per cent, ratcheting up his tit-for-tat with Beijing.
Beijing had earlier in the day raised the tariffs on a wide range of US goods to 84 per cent starting Thursday, a sharp escalation from the previously announced 34 per cent in retaliation to Trump’s ‘Liberation Day’ tariffs.
Trump, in a Truth Social post, said he has “authorised a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
The White House also confirmed Trump’s statement saying the lowered 10% tariff for other countries are effective immediately.
President Trump in his post also stated that he was increasing US tariffs on China to pressure Beijing into negotiations.
“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 USA, and other Countries, is no longer sustainable or acceptable,” he wrote.
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Moments after the announcement, Treasury Secretary Scott Bessent called it rewarding for the countries that chose not to retaliate amid a brewing trade war.
“Do not retaliate, and you will be rewarded,” he said. He noted that the tariff rate on Chinese goods has been raised “due to their insistence on escalation”.
“It took great courage, great courage for him to stay the course until this moment,” Bessent told reporters at the White House, CNN reported.
“Every country in the world who wants to come and negotiate, we are willing to hear you,” he added.
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The White House’s press secretary, Karoline Leavitt, said Trump had raised tariffs against China because “when you punch at the United States of America, President Trump is going to punch back harder”.
Global markets surged after Trump announcement with S&P 500 surging 5.6%, while the Nasdaq jumping over 8%.
China has pledged “resolute and forceful” countermeasures after sweeping — part of a wider package targeting 60 countries — officially came into effect just after midnight Wednesday US time.
Speaking at a daily press briefing, Chinese Foreign Ministry spokesperson Lin Jian condemned Washington’s moves in stark terms. “China continues to take firm and resolute measures to safeguard our legitimate rights and interests,” he said. “We will not tolerate any attempt to harm China’s sovereignty, security and development interests.”
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However, Washington was quick to fire back, with US Treasury Secretary Scott Bessent telling Fox Business, “They(China)’re the surplus country… Their exports to the US are five times our exports to China. So they can raise their tariffs. But so what?” He also accused Beijing of being the “worst offenders in the international trading system” and lamented their refusal to negotiate.
Trade war
The looming slugfest between the world’s two largest economies is casting a dark shadow over global trade, with analysts raising the spectre of an American recession.
China and the United States edged dangerously close to a full-blown trade war on Tuesday after President Donald Trump announced a staggering 104 per cent tariff on all Chinese imports. Locked in an escalating showdown, neither side showed signs of backing down — with Beijing vowing to resist US pressure “to the end.”
Trump initially imposed a 34 per cent tariff on Chinese goods, which was swiftly met with an equivalent retaliatory measure by Beijing. In response, the US added another 50 per cent in duties. When combined with earlier levies from February and March, the total tariff burden on Chinese imports under Trump’s second term now stands at 104%, bringing fears of a near-embargo scenario.
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In February, Donald Trump slapped a 10 per cent tariff on all Chinese goods with no carve-outs, citing Beijing’s alleged role in fuelling illegal immigration and facilitating the flow of fentanyl into the United States. Last month, he doubled those rates — a move that sent shockwaves through global markets and deepened already strained US-China relations.
China, which was America’s second-largest source of imports last year, shipped $439 billion worth of goods to the US, compared to $144 billion in American exports to China. The rising tariffs now threaten to hit domestic industries hard, with businesses warning of cost surges, layoffs, and reduced competitiveness.
By the end of Trump’s first term, the average US tariff on Chinese goods stood at 19.3 per cent, according to the Peterson Institute for International Economics. The Biden administration largely maintained those tariffs — even expanding them — bringing the average to 20.8 per cent.
