Trump pauses tariffs for most countries, escalates trade war with China

U.S. President Donald Trump has announced a 90-day pause on higher tariffs for many countries, while sharply increasing tariffs on Chinese goods to 125%, escalating tensions with Beijing.

The decision comes just hours after sweeping U.S. tariffs took effect against around 60 trading partners. Trump introduced a “lowered reciprocal tariff” of 10% for most countries as trade talks continue.

China, however, was hit with the steep hike after it retaliated with an 84% tariff on U.S. imports. Trump accused China of showing “a lack of respect” and warned that “the days of ripping off the U.S.A.” were over.

Last week, Trump introduced a baseline 10% tariff on all imports and additional higher tariffs on countries he called the “worst offenders,” including the EU, Vietnam, and South Africa. These ranged from 11% to over 100%.

The move shook global markets, causing widespread sell-offs and pushing U.S. debt interest rates to 4.5%, the highest since February. But after Trump’s pause announcement, U.S. markets rebounded strongly. The S&P 500 rose 9.5%, and the Dow Jones gained 7.8%.

Trump said countries that did not retaliate would benefit from the 90-day pause. “If you retaliate, we’re going to double it and that’s what I did with China,” he said.

China responded strongly. Foreign ministry spokesperson Lin Jian called U.S. actions “bullying practices” and said China demands “mutual respect” in negotiations.

According to the World Trade Organization, the trade war could cut trade between the U.S. and China by up to 80%, equal to about $466 billion.

Other tariffs remain unchanged, including 25% on cars and steel. The European Union, though on Trump’s “worst offender” list, has not yet implemented its retaliatory tariffs and will now face only the 10% U.S. baseline.

The UK is unaffected by the changes and remains under the 10% base tariff. A spokesperson for the British government said, “A trade war is in nobody’s interest.”

The trade dispute between the U.S. and China shows no signs of cooling, with both sides threatening further actions.