Trump raises China tariffs to 125%, pauses those on most other nations for 90 days

Amid a global market meltdown, US President Donald Trump announced a further tariff hike on imports from China – to 125 per cent – on Wednesday, while placing a 90-day pause on punitive levies aimed at most other nations. Markets surged on the news, with the benchmark S&P 500 index rising almost 10 per cent following Trump’s early afternoon announcement, reversing a nearly 20 per cent drop over the course of four previous trading sessions. Speaking to reporters after the announcement, Trump said that leading up to the pause in his so-called “reciprocal” tariffs, some 75 countries had been entreating him to make a deal – and he predicted that China under President Xi Jinping would follow suit soon enough. “China wants to make a deal. They just don’t know how quite to go about it. You know, it’s one of those things, quite proud people,” he said. “President Xi is a proud man. I know him very well. They don’t know quite how to go about it, but they’ll figure it out. They’re in the process of figuring it out.” Trump said he did not expect to raise the levies on Chinese imports above 125 per cent. “I can’t imagine it. I don’t think we’ll have to do it more,” he said. “No, I don’t see that.” Asked whether he was trying to form a coalition against China on trade, the president said “no”, blaming former US president Joe Biden’s administration for the state of global trade. “There are a lot of things I’d like China to do,” he added. Trump also said talks were moving along over the ownership TikTok. The US Congress passed a law last year that forced its Chinese owner, ByteDance, to either sell the app or face a US ban, although Trump has extended the deadline to allow for an eventual deal. “We have to wait and see what happens with China,” he said, when asked about the prospects for a TikTok deal. The president also said he was open to a sit-down with the Chinese president. “He’s a friend of mine,” he said. “Sure, I’d meet with him.” Trump’s latest tariff move postponed, at least temporarily, what had been the start of an unprecedented trade war against most of the world, narrowing it to one between Washington and Beijing. But most countries other than China will revert to the baseline 10 per cent tariffs Trump announced last week for the duration of the 90-day period. Before the latest hike, Trump’s effort to bring Chinese officials to the negotiating table had brought the cumulative total of additional US import duties on Chinese products to 104 per cent. Beijing responded earlier on Wednesday by announcing that it would impose an additional 50 per cent tariffs on all imports from the US, to a total of 84 per cent. At the close of the session on Wednesday, the S&P was up 9.5 per cent; the Dow Jones Industrials average soared nearly 3,000 points, or almost 8 per cent; and the tech-heavy Nasdaq, battered during the previous week of trading, rocketed more than 12 per cent. However, the details of Trump’s plans to ease tariffs on trading partners other than Beijing were not immediately clear, and concerns remain since US-China trade accounts for a significant portion of America’s total foreign trade. China was America’s second-largest import source last year in terms of value, which was pegged at US$439 billion, according to US government data. That was just behind Mexico, which shipped goods worth US$506 billion. In comments to reporters on the White House grounds, Trump took a victory lap, contending that his threatened tariff hikes were an effective strategy, including when it came to China. “Somebody had to pull the trigger. I was willing to pull the trigger,” Trump said. “If you look at it, not only with China, but China was by far the biggest abuser in history, and others also. “But somebody had to do it. They had to stop because it was not sustainable.” Trump added that he was willing to consider cutting deals with businesses that would be severely affected by the tariffs. “There are some that, by the nature of the company, get hit a little bit harder. And we’ll take a look at that,” he said. “You almost can’t take a pencil to paper. It’s really more of an instinct, I think, than anything else.” Asked about his sudden reversal involving tariffs on countries other than China – after vowing not to back down – Trump said that the timing seemed right, even as he took obvious pleasure in the soaring stock market. “You have to be able to show a little flexibility, and I’m able to do that,” he said. “Sometimes you have to be able to go under the wall, around the wall, or over the wall.” Administration officials said that, going forward, they would look favourably on countries that did not threaten to retaliate against the US. Trump’s tariff pause came amid a chorus of warnings from economists and Wall Street executives that the levies set the US on course for a recession, higher inflation and job losses. On Monday, for example, billionaire fund manager Bill Ackman – a donor to Trump’s election campaign – urged the president to put the tariffs on hold or risk “a self-induced, economic nuclear winter”. The Wall Street Journal reported that Trump watched a Fox News interview with JPMorganChase chief executive Jamie Dimon on Wednesday morning, before his abrupt reversal. Dimon said that recession was a “likely outcome” of Trump’s strategy. Speaking to reporters shortly after Trump’s announcement, Treasury Secretary Scott Bessent dismissed suggestions that the steep declines in US capital markets in recent sessions had forced the president’s hand. He reiterated Trump’s claim that some 75 trading partners had signalled a willingness to negotiate. Using tariffs as a bargaining chip was Trump’s strategy “all along”, Bessent claimed. “You might even say that [Trump] goaded China into a bad position” because Beijing responded with retaliatory measures, he said. “They have shown themselves to the world to be the bad actors, and we are willing to cooperate with our allies and with our trading partners who did not retaliate.” Bessent said Trump’s trade team was meeting with negotiators from Vietnam in Washington on Wednesday, and that Japan “was going to send a deal team over”. Hanoi had been hit with a 46 per cent tariff – one of the highest rates among the so-called “reciprocal” tariffs – and Japan’s rate was 24 per cent. Bessent did not respond to questions about why the 90-day pause also applied to the EU even though the bloc announced retaliatory tariffs against the US earlier on Wednesday. White House Press Secretary Karoline Leavitt said that the narrative that the world would turn to China as Washington raised the trading temperature had been proven wrong. “We’ve seen the opposite effect. The entire world is calling the United States of America, not China, because they need our markets,” she said. “The president has shown great courage, as the secretary has said, in choosing to retaliate against China even higher.” Daniel Russel, vice-president with the Asia Society Policy Institute, said that Trump was attracting criticism even from allies for evidently blurring the real priority, namely China. “The pause leaves China alone in the crosshairs facing 125 per cent tariffs while others get a temporary reprieve,” said Russel, formerly with the National Security Council during the Barack Obama administration. “But the whiplash from constant zigzags creates more of the uncertainty that businesses and governments hate.” Beijing is unlikely to change its strategy, which is essentially to stand firm, absorb the pressure and wait until Trump overplays his hand, Russel added. “Beijing believes Trump sees concessions as a weakness, so giving ground only invites more pressure.” Terry Haines of Pangaea Policy, a Washington-based advisory firm, called the singular focus on China a factor of “unknown severity”. “The geopolitical strains from the US-China elevated geopolitical risk aren’t going away, and will be an undertow of unknown severity,” Haines said. “Tariffs negotiations continue, and it’s more than a trailing risk that we’ll be in a broadly similar situation 90 days from now,” he added. “Wall Street shouldn’t make the mistake of thinking it’s won somehow – even though that’s exactly what it will do.”

Trump raises China tariffs to 125%, pauses those on most other nations for 90 days

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Markets soar on the move, seemingly an attempt to narrow a US trade war with most of the world to one between Washington and Beijing

Markets soar on the move, seemingly an attempt to narrow a US trade war with most of the world to one between Washington and Beijing