US President Donald Trump announced a 90 day pause and lowered reciprocal tariffs on Wednesday amid an escalating global trade war. The POTUS however indicated that tariffs against China would be hiked yet again — the second time in 24 hours — to 125% with immediate effect. The main indexes on Wall Street have rose sharply in response with Dow gaining 2000 points while NASDAQ jumped 8%. The precise details of Trump’s plans to ease tariffs on non-China trade partners were not immediately clear.
“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!” he wrote on Truth Social.
104% tariffs against China
The POTUS also lambasted China for retaliating repeatedly against the US tariffs and announced that he was raising the tariffs for China to 125% with ‘immediate effect’. The change comes mere hours after Trump raised tariffs against China to 104%. Beijing had consequently hit back earlier on Wednesday with an 84% retaliatory tariff slated to go into effect from April 10.
“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,” he added.
No TikTok deal amid trade war?
The escalating a high-stakes confrontation between the world’s two largest economies is likely to impact other areas of interaction. A Fox News reporter said that White House officials now concede that a potential TikTok sale to an US company is off the table for the foreseeable future and ‘maybe forever’ amid a trade war.
Tariffs against Mexico, Canada
Treasury Secretary Scott Bessent said that the rate of tariffs would come down to 10% for countries looking to negotiate with the US — including against Canada and Mexico. CNBC reporter Megan Casella also said that the White House was now indicating that 10% baseline tariffs would apply to Canada and Mexico. But it is yet to specify whether this is the effective new rate or whether this was being added to the previously imposed 25% fentanyl tariff — making the new rate 35% — or whether it would kick in only if the fentanyl tariff fell away.