US President Donald Trump announced a 90-day suspension of his seismic tariffs on Wednesday, offering temporary relief to trading partners while escalating pressure on China with a steep tariff hike.
- •Under the revised framework, a universal 10% tariff will be applied to all countries during the pause.
- •Notably, tariffs on Chinese imports surged to 125%, a marked escalation reflecting the administration’s intensifying frustration with Beijing’s decision to retaliate.
- •China imposed a steep 84% tariff on U.S. imports, a hardline stance Beijing took to counterbalance Washington’s aggressive economic measures.
“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,” President Donald Trump posted on Truth Social.
“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,” Trump added.
Meanwhile, the European Union (EU) is set to impose retaliatory tariffs on up to US$23 billion worth of U.S. exports, a move triggered by the Trump administration’s tariffs on steel and aluminum.
Among the targeted goods are American-made motorcycles, soybeans, and meats. The tariffs will take off in mid-April 2025, underscore the delicate balance the EU seeks to strike between asserting its position and avoiding further escalation in global trade jitters.
How the Markets Responded
Markets surged in response to the tariff relief as Nasdaq soared 12% while the S&P 500 rose 9.5% and the Dow gained nearly 3,000 points. The rally signaled investor optimism that the pause could offer breathing room to recalibrate global supply chains and soften the blow of Trump’s protectionist policies.
According to U.S officials, the decision was finalized early Wednesday after consultations with Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent. Media reports say that the pause had long been considered by the Trump administration as part of a broader negotiation strategy.
The White House said the coming weeks will be used to engage more than 75 nations in bilateral discussions. The administration’s move reflects a complex balance: maintaining leverage in trade talks while tempering domestic and international backlash.
