Global markets surged after Donald Trump announced a 90-day pause on new U.S. tariffs for most trading partners—while dramatically increasing tariffs on Chinese imports to 125%. The move, aimed at easing fears of a global recession, triggered an immediate bounce-back in the S&P 500 and other global indices. This bold economic maneuver, part of Trump’s “Liberation Day” tariff strategy, marks a pivotal shift in U.S. trade policy.
Trump’s 90-Day Tariff Pause: What It Means
Relief for Over 75 Countries
In a post on Truth Social, former President Donald Trump stated that more than 75 countries that did not retaliate against his tariffs would now face a reduced 10% import tariff—a sharp drop from the previously proposed rates (20% for the EU, 24% for Japan, 25% for South Korea). This reduction is effective immediately and will last for 90 days.
The UK, which was already set to be under the 10% tariff bracket, sees no change in its trade terms under the pause.
Markets React Positively
Global markets breathed a sigh of relief. The S&P 500 surged by 9.5%, signaling investor confidence returning amid easing tensions. Concerns about a global recession had been mounting after Trump first introduced the “Liberation Day” tariffs on April 2, sparking sharp market declines.
China Faces a Steep 125% Tariff
No Relief for Beijing
While most countries benefit from the pause, China is facing the full force of Trump’s aggressive trade stance. The U.S. has now slapped a 125% tariff on Chinese imports, a move that took immediate effect.
Trump justified the action, stating:
“China will realise that the days of ripping off the USA… is no longer sustainable or acceptable.”
China Responds with Retaliation
Hours before the 125% U.S. tariff was announced, Beijing raised its tariffs on American goods to 50%, bringing the total tariffs on U.S. imports into China to 84%. This escalates trade tensions between the two economic giants and puts further pressure on already strained diplomatic relations.
What About Canada and Mexico?
Despite the general pause, the 25% tariffs on some imports from Mexico and Canada remain in place. A White House official clarified that these duties were not part of the “Liberation Day” announcements and will continue unchanged.
Trump’s Take: “People Were Getting Yippy”
In a characteristically colorful press briefing, Trump explained his decision to ease some tariffs:
“They were getting a little bit yippy, a little bit afraid.”
He added that China is interested in making a deal, but suggested that pride and uncertainty about how to approach negotiations are holding them back.
Conclusion: A High-Stakes Balancing Act
Trump’s tariff adjustments reflect a calculated attempt to calm global markets while maintaining a hardline stance on China. As the 90-day countdown begins, all eyes will be on Beijing’s response—and whether Trump’s gamble pays off in both economic and political terms.
