Donald Trump announces 90-day tariff pause; DOW shoots up 2,400 points, NASDAQ 1,400

China stated in the white paper that raising tariffs cannot solve the the problems of the US. Instead it would lead to violent fluctuations in the markets and increase US inflationary pressure, weakens the US industrial base, increases the risk of a US recession, and will ultimately lead to the US suffering the consequences.

China’s central bank is taking steps to stop the yuan from falling too quickly. According to people with direct knowledge of the situation, it has told big state-owned banks to cut back on buying US dollars, reported Reuters. This move comes as the yuan has been losing value because of new, heavy US tariffs on Chinese exports and China’s own actions in response. The central bank wants to keep the currency stable during this difficult time.

The White Paper states that the United States has a strong edge in service trade, Xinhua reported. In fact, China’s biggest service trade deficit is with the US, and this gap has been growing over time. In 2023, the deficit reached $26.57 billion, making up about 9.5% of the U.S.’s total service trade surplus. China said that on looking at the full picture, including trade in goods, trade in services, and the local sales of each country’s companies operating in the other, it turns out that the overall economic and trade benefits between China and the US are fairly balanced.

The White Paper, as per Xinhua, states that China and the United States are two major countries with different economies and levels of development, so it’s normal for them to have disagreements in trade. What’s important is that both sides respect each other’s main interests and concerns, and solve problems through fair and equal talks. “China is willing to communicate with the US on important issues in the economic and trade fields and resolve respective concerns through equal dialogue and consultation to jointly promote the stable, healthy, and sustainable development of China-US economic and trade relations,” the White Paper said, reported Xinhua.

The White Paper released by China states that both the countries have built a trade relationship based on mutual benefit, where both China and US have gained. Since they established diplomatic ties 46 years ago, their economic partnership has grown quickly. It says that investment in each other’s countries now totals over $260 billion. Over the years, trade and business cooperation have expanded in many areas, helping both economies grow and improving people’s lives.

But in recent years, the US has moved toward unilateral decisions and trade protectionism, including adding tariffs on Chinese goods. These actions have disrupted the usual trade and economic cooperation between the two countries. In response, China has had to take necessary steps to defend its interests.

According to the Xinhua state media, the white paper consists of has six parts:

– ‘The Essence of China-US Economic and Trade Relations is Mutual Benefit and Win-Win’

– ‘China Earnestly Implements the China-US Phase One Economic and Trade Agreement’

– ‘The US Violates Relevant Obligations of the China-US Phase One Economic and Trade Agreement’

– ‘China Practices the Concept of Free Trade and Earnestly Abides by WTO Rules’

– ‘Unilateralism and Protectionism Harm the Development of Bilateral Economic and Trade Relations’

– ‘China and the US Can Resolve Economic and Trade Differences Through Equal Dialogue and Mutually Beneficial Cooperation’

China has released a White Paper on Wednesday about its trade and economic relationship with the United States, according to Xinhua news agency. China said that its right to development could not be deprived and that it will take countermeasures to safeguard its own interests and rights. Quoting the White Paper, Xinhua said that China “has always believed in essence of China”. It also said that it’s normal for the world’s two biggest economies to have disagreements in trade and business, and that China is open to talks with the US to solve these issues.

A trade war happens when countries start putting taxes or limits on goods coming from other countries. They usually do this to protect their own businesses from foreign competition. While the US has been targeting China for some time, starting back in 2018 during Trump’s first term, the situation has now gotten much worse. What’s new is that these tough tariffs are now affecting many more countries, not just China. For the rest of the world, this marks a fresh and serious phase in the trade conflict. How other countries, including the UK, choose to react to Trump’s latest tariffs will be important to watch in the coming days.

Germany could face another recession due to rising trade tensions caused by Trump’s new tariffs, Finance Minister Joerg Kukies said in a radio interview on Wednesday, reported Reuters. He explained that a growing trade conflict clearly adds to the risk of a recession. Germany has already gone through two years of economic decline, and a third downturn in 2025 would make it one of the longest slowdowns in the country’s history. According to sources who spoke to Reuters on Tuesday, German economic institutes are expected to lower their growth forecast for 2025 to just 0.1% — and that estimate doesn’t yet include the impact of Trump’s latest tariffs.

China’s top leaders are planning to hold a meeting as early as Wednesday to discuss ways to support the economy and calm the financial markets, Reuters said in an exclusive report attributing to sources familiar with the matter. This comes as the trade conflict with the US continues to grow. The meeting follows a sharp increase in US tariffs on Chinese goods, which jumped to 104% on Wednesday.

India is trying to negotiate a bilateral agreement with the US by fall this year, External Affairs Minister S Jaishankar said on Wednesday. The minister said that it wasn’t possible for him to comment on tariff impact as they still don’t know it yet. He informed that India has in touch with the US early on and it is the only nation to have reached an understanding wit the US to agree on a bilateral trade deal.

China is uniting in anti-Trump sentiment as the US imposed a total of 104% tariff against the country, which came into effect today. This morning, over half of the top 10 trending topics on the popular social media platform Weibo are related to the US or tariffs, reported BBC. However, it’s important to remember that Weibo is closely monitored and controlled, so the content visible now has already been filtered by the censors.

ASEAN needs to “act boldly” to speed up regional economic cooperation, as major US tariffs are causing problems for many countries caught in a growing trade war, the bloc’s chief leader said on Wednesday, reported AFP. The 10-member Association of Southeast Asian Nations, which rely heavily on the US as a key market for exports, were among those hit with the highest tariffs by Trump. ASEAN Secretary-General Kao Kim Hourn said that to stay strong and important in a world where economic troubles are becoming common, they must take bold and united action to show ASEAN’s support for a stable and business-friendly region.

Gold prices went up by 1% on Wednesday as the US dollar weakened after President Donald Trump’s tariffs on China came into effect, Reuters reported. Many investors turned to gold, a safe option during uncertain times, as trade tensions and fears of a global recession grew stronger. As of 5:00 a.m. GMT, spot gold was up 0.9% at $3,010.39 per ounce, after gaining 1% earlier in the day. U.S. gold futures also rose by 1.2% to $3,026.90, reported Reuters.

Taiwan is witnessing steep losses! The TAIEX index was down nearly 6% an hour after Trump’s tariffs came into effect. Taiwan has been hit by 32% tariff by the US. Trump had on Tuesday threatened to impose 100% tariff on Taiwan Semiconductor Manufacturing Company, if they did not shift their production plant in the US.

The RBI has lowered the GDP growth forecast to 6.5 per cent from earlier projection of 6.7 per cent due to global uncertainties. The announcement comes after Trump’s 26% tariffs against India came into effect today.

The RBI cut its main interest rate again on Wednesday, trying to support the economy amid more pressure under the new US tariffs that have come into effect today. The Monetary Policy Committee cut the repo rate by 25 basis points, bringing it down to 6.00%. The RBI had already cut the rate by the same amount in February, its first cut since May 2020. The new US tariffs on Indian goods could hurt the RBI’s growth target of 6.7% for 2025–26, along with government’s forecast of 6.3% to 6.8%.

Indian pharmaceutical stocks dropped by 1.7% on Wednesday after Donald Trump repeated his plan to introduce a “major” tax on all medicine imports. The US is the biggest market for Indian drug exports, making up about one-third of the total. Trump had first warned about these tariffs last Friday. At that time, his earlier set of tariffs did not include medicines, which caused pharma stocks to rise and fall sharply, according to Reuters.

A pro-Beijing commentator has slammed the United States for acting like “a bull in a China shop” after it placed heavy tariffs on Chinese goods, a BBC report said. Victor Gao, vice-president of the Center for China and Globalisation in Beijing, spoke to the BBC Newsday programme and said that the tariffs “will not bring manufacturing jobs back to the United States”. He also said that Trump and his administration must wake up to sanity and use reason rather than maximum bullying against China and so many other countries.”

Gao believes the Chinese government “will not blink” in what he describes as a “total war” over trade.

Indian stock markets dropped on Wednesday after a short recovery the day before. The fall came as global markets reacted to rising trade tensions, just as Trump’s 26% tariff came into effect today. The RBI‘s decision on interest rates and economic support is also awaited. By 9:50 a.m. IST, the Nifty 50 was down 0.61% at 22,401.35, and the BSE Sensex dropped 0.45% to 73,885.3, as per PTI. Twelve out of thirteen main sectors saw losses. Smaller companies and mid-sized firms also fell by 1.3% each.

The Indian rupee, along with other Asian currencies, was pegged down on Wednesday by a weaker Chinese yuan. By 9:40 a.m. IST, the rupee had fallen by 0.4%, reaching 86.65 against the U.S. dollar. This happened after Trump’s new “reciprocal” tariffs came into effect, including a very high 104% tax on Chinese goods and 26% tariff on India.

A new round of US tariffs which began today, has targeted many countries with US President Donald Trump mainly focusing on China while pushing this trade war further. These new custom tariff rates apply to about 60 countries where they supersede baseline duties that began on Saturday. Most of the new tariffs are between 11% and 50%. But because China is responding with its own taxes, US tariffs on Chinese goods will climb even higher this year, reaching the mark of 104%.

US President Donald Trump’s new tariffs on many countries came into effect on Wednesday. These include steep 104% taxes on Chinese goods, adding more pressure to the ongoing global trade war, and 26% tariffs on India as well. Trump’s tough tariff policies have raised concerns about a possible recession and have led to sharp drops in stock markets around the world.

New Zealand’s central bank has lowered its interest rates to deal with the impact of new US tariffs, a BBC report said. The bank cut its main lending rate on Wednesday by 25 basis points, bringing it down to 3.5%. Lower interest rates usually boost the economy by making it cheaper for people and businesses to borrow money. Officials said they made this move as the impact of the tariffs became more clear, the BBC report added. Over the weekend, a 10% tariff was placed on New Zealand’s exports to the US. However, the New Zealand government said it will not strike back with its own tariffs.

Chinese currency yuan fell again against the US dollar on Wednesday, reaching its lowest level in 19 months. This happened after it hit a record low in overseas markets overnight, as concerns over the trade tensions between China and the US kept growing. In morning trading, the yuan dropped to 7.3505 per dollar — its weakest since September 2023. Later, the offshore yuan recovered a bit, increasing by 0.62% to 7.3812 per dollar in Asian markets. This came after it had fallen over 1% the day before, hitting a record low of 7.4288 per dollar overnight.

The drop is happening as the trade conflict between China and the US is worsening day by day. Analysts have said that China’s central bank is allowing the yuan to weaken to help support its exports, which are being hurt by new tariffs.

South Korea has announced additional help worth three trillion won (about $2 billion) for its car industry, a CNBC report said. This comes after the US raised tariffs to 25% earlier this month. The support includes financial aid for carmakers, along with tax breaks and discounts, based on a translated version of the announcement.

Even with this news, shares of big car companies still fell. Hyundai’s stock dropped 0.56%, and Kia’s went down 1.3%.

Trump has signed an order that will lead to an increase in taxes on low-value packages coming from China to the US through international mail, reported CNBC. Earlier, he had set a 30% tax or $25 (whichever is higher) on packages worth less than $800, starting from May 2. Now, the tax is going up to 90% of the package’s value or $75, and it will increase again to $150 after June 1. Earlier, packages under $800—called de minimis packages—didn’t have to pay any tax. This tax-free rule had helped big Chinese online sellers like Shein and Temu, who send goods straight to US buyers by international mail.

In just a few hours, tariffs on many Chinese goods entering the US are set to increase to 104%. Some items, like cars, computer chips, steel, and aluminium, will have lower tax rates. China has not shown any signs of backing down and plans to put its own taxes on goods from the US. However, some experts believe these higher taxes will strongly affect China, a BBC report said.

They say that China may depend more on people buying goods within the country, the report said. According to Dan Wang from the Eurasia Group, if tariffs go above 35%, Chinese businesses won’t make any profit from exports to the U.S. or Southeast Asia, BBC reported. Any tax above that, she said, is mostly for show. She also said that if China is shut out from global trade, it may not reach its goal of around 5% growth this year. That’s because exports have made up 20% to 50% of China’s economic growth since the pandemic, reported BBC.

Trump has said that the US will soon announce “major tariff” on pharmaceuticals. Speaking at the Republican dinner, he said that the move will pressurise pharmaceutical companies in China to shift their operations to the US.

White House press secretary Karoline Leavitt told reporters on Tuesday that President Donald Trump does not intend to postpone the upcoming tariffs. At the same time, the administration is starting trade talks with individual countries. Leavitt said the focus will be on working with U.S. allies and partners first. The trade team will handle different countries separately to create customized trade agreements.