Trump pauses global tariffs for 90 days, escalates China trade war with 125% tariff
United States President Donald Trump has temporarily rolled back tariffs on most nations for 90 days following a dramatic plunge in global markets, even as he intensified the trade war with China by hiking duties on Chinese imports to 125%.
The abrupt policy shift, announced on Wednesday, marks an effort by the Trump administration to refocus its trade strategy, narrowing what had been a sweeping tariff regime to a high-stakes economic standoff between the U.S. and China. Trump’s decision sparked a sharp rebound in financial markets, with the S&P 500 surging 9.5%.
The president disclosed on his social media platform, Truth Social, that the pause came after more than 75 countries approached the U.S. for trade talks. “I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump posted.
Trump later explained the reasoning behind the shift, attributing it to public anxiety over the market slump. “People were yippy and afraid,” he told reporters. “The bond market is very tricky... I was watching it. But if you look at it now, it’s beautiful.”
The White House's decision comes amid mounting pressure from investors and business leaders, who warned that the tariffs—initially imposed across major trading partners—were fueling inflation fears and threatening a recession. Many businesses had also reported dwindling profits and rising operational costs.
Commerce Secretary Howard Lutnick insisted that the tariff pause was not driven by market volatility, but rather by the desire of other countries to engage in negotiations. “Definitively, it was not the markets,” he said.
However, that claim was contradicted by President Trump himself, who acknowledged that rising bond yields and falling investor confidence prompted the policy review. “I’ve been thinking about this for a few days,” he admitted. “It came together early this morning.”
Treasury Secretary Scott Bessent confirmed that talks with individual countries will now begin on a “bespoke” basis. “The only certainty we can provide is that the U.S. is going to negotiate in good faith, and we assume that our allies will too,” he said.
While tariffs for most countries will now be set at a base rate of 10%, Canada and Mexico remain subject to tariffs as high as 25% under a separate directive targeting illegal fentanyl trafficking.
Despite the easing for most countries, Trump remained firm on China. The tariff on Chinese goods was increased to 125%, underscoring what he described as an effort to “goad China into a bad position,” according to Bessent.
Critics argue that the administration’s erratic handling of trade policy has led to widespread uncertainty. Delta Air Lines CEO Ed Bastian remarked, “Trying to do it all at the same time has created chaos in terms of being able to make plans.”
Economists have similarly expressed concern over the broader economic fallout. “Simultaneous shocks to consumer sentiment, corporate confidence, trade, financial markets as well as to prices, new orders and the labor market will tip the economy into recession in the current quarter,” warned Joe Brusuelas, chief economist at RSM.
Nonetheless, Trump’s allies defended the move as a calculated step. Billionaire investor Bill Ackman, who had earlier urged the president to consider a pause, described the decision as “brilliantly executed” and praised it as “Textbook, Art of the Deal.”
Meanwhile, the World Trade Organization has warned that continued escalation between the U.S. and China could “severely damage the global economic outlook” and lead to “potential fragmentation of global trade along geopolitical lines,” according to WTO Director-General Ngozi Okonjo-Iweala.
With negotiations expected to stretch over the coming months, global markets remain on edge, awaiting further signals from the Trump administration on whether this latest shift marks a tactical pause or the beginning of a broader policy recalibration.
