Donald Trump has decided to halt his “reciprocal” tariffs on most of America’s trading partners for a period of 90 days, while simultaneously increasing tariffs on China to 125%.
Following Mr. Trump’s announcement of “Liberation Day” tariffs on Wednesday, April 2nd, there were concerns about a potential global recession and stock markets worldwide experienced a significant drop.
However, the S&P 500 stock index surged by 9.5% and global markets rebounded after Mr. Trump’s latest announcement on Wednesday, revealing that the heightened tariffs on nearly all trading partners would be put on hold.
Latest on Tariffs: Trump gives reasons for pausing some tariffs
In a post on his Truth Social platform, Mr. Trump stated that the “90-day pause” applies to the “more than 75 countries” that had not countered his tariffs in any manner.
During this period, these countries will still be subject to a reduced 10% tariff, which will be effective immediately.
This percentage is lower than the previously set tariffs of 20% for the European Union, 24% for Japan, and 25% for South Korea.
The UK was already scheduled to face a uniform 10% tariff under the new arrangement.
Mr. Trump also declared the increased 125% tariff on imports from China to be immediately enforceable.
He added: “It is hoped that China will eventually realize that continuing to exploit the USA and other nations is no longer sustainable or acceptable.”
Following Mr. Trump’s announcement of the pause on tariffs for most countries, a White House official clarified that this exemption did not extend to the 25% duties imposed on select US imports from Mexico and Canada.
These tariffs were initially unveiled in February, and Mexico and Canada were excluded from the “Liberation Day” announcements.
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Donald Trump says China ‘wants to make a deal’
Just before the 125% tariff increase on China was announced, Beijing declared a 50% rise in tariffs on US goods.
This move meant that US goods would now face tariffs of 84%, up from the previously planned 34% by China.
Mr Trump spoke to reporters in the Oval Office. Pic: Reuters
China ‘want to make a deal’
When asked why he posted “BE COOL” on Truth Social before announcing the tariff pause, Mr. Trump explained during a press briefing at the White House that he felt the situation was escalating unnecessarily.
He stated, “They were getting jumpy and a bit fearful,” referring to the general sentiment.
Mr. Trump added: “China seeks to negotiate a deal, but they are unsure of the approach.
“The Chinese are a proud nation, with President Xi being a proud individual. I have a good understanding of him, and they are in the process of figuring it out, but they are keen to reach an agreement.”
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White House press secretary Karoline Leavitt insisted that Mr. Trump’s actions were part of a calculated negotiating tactic.
“President Trump has strategically strengthened his negotiating position,” she affirmed, highlighting the media’s failure to understand his approach.
US Treasury Secretary Scott Bessent echoed the sentiment, emphasizing Mr. Trump’s enhanced bargaining power through his tariff decisions.
“President Trump has strategically strengthened his negotiating position,” he reiterated.
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Mr. Bessent reiterated that Mr. Trump’s decision to raise tariffs on China was a response to Beijing’s lack of communication and their own tariff hikes on US products.
On the UK’s front, Downing Street assured that negotiations with the US would continue in a composed and rational manner.
A spokesperson for Number 10 affirmed, “A trade war is detrimental to all parties. We aim to avoid any tariffs altogether, and therefore, for the benefit of jobs and livelihoods across the UK, we will proceed with negotiations in the best interest of Britain.”