Trump Pauses Higher Duties on Most Nations, Hikes China Rate
President Donald Trump announced a 90-day pause on higher reciprocal tariffs that hit dozens of trade partners after midnight, while raising duties on China to 125%.
The president’s about-face comes roughly 13 hours after higher reciprocal duties on 56 nations and the European Union went into effect, a move that fueled market turmoil and stoked recession fears. Trump came under massive pressure from business leaders and investors to reverse course.
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump posted Wednesday on social media.
Countries that were hit with the higher, reciprocal duties that went into effect Wednesday will now be taxed at the earlier 10% baseline rate applied to other nations, with the exception of China, according to a White House official. Trump said that more than 75 countries had contacted his administration to negotiate on trade barriers and “have not, at my strong suggestion, retaliated in any way, shape, or form.”
Trump’s decision to raise import taxes even further on China came after Beijing announced plans to retaliate with an 84% duty on American goods set to begin Thursday. The Trump administration has taken particular aim at China over its trade practices and its combative approach to the president’s tariff plans.
“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,” Trump said in a social media post.
Treasury Secretary Scott Bessent on Wednesday cast the turnabout as a victory for Trump, telling reporters the president “created maximum negotiating leverage for himself” in talks with other nations. He said he would be speaking to officials from Vietnam, Japan, India and South Korea in the coming days.
“It took great courage for him to stay the course until this moment,” Bessent said at the White House. “This was his strategy all along.”
Billionaire investor Bill Ackman, a recent convert to Trump’s cause, on Sunday called for a three-month “time out” from the higher rates, which he warned could result in a “self-induced, economic nuclear winter.”
“By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital,” Ackman said.
Trump and his allies for days ahead of his announcement denied they were considering a blanket pause before the reciprocal tariffs were implemented. Top White House economic adviser Kevin Hassett was asked about the possibility on Monday during an interview with Fox News, and deferred to “what the president is going to decide.” But when social media posts suggesting Trump was considering such a pause drove a market rally, the White House decried the reports — which erroneously cited Hassett — as “fake news.”
Bessent said the president’s decision “signals that President Trump cares about trade and that we want to negotiate in good faith” and described the previously announced reciprocal duties as the “maximum level” for US tariffs.
Source : Bloomberg
