President Donald Trump announced Wednesday that he is implementing a 90-day pause on retaliatory tariffs for countries that have come to the negotiating table, while raising tariffs on China to 125 percent following Beijing’s latest retaliatory levies.
Trump stated on Truth Social that he is lowering the retaliatory tariffs he unveiled earlier this week for the “worst offenders” to the baseline rate of 10 percent after more than 75 nations expressed a willingness to negotiate new trade deals with the U.S. He vowed not to raise rates on those countries for 90 days while negotiations proceed.
“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 posted.
“Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump added.
Stocks immediately surged upon Trump’s announcement with each of the three major indexes jumping by over 7 percent. Wall Street has been reeling since last week when Trump announced a dramatic global tariff package consisting of a 10 percent minimum tariff and much higher tariff rates for many countries worldwide.
Many forecasters predicted Trump’s tariffs would immediately cause a significant uptick in consumer prices and reduce economic growth, with some expecting tariffs to quickly send the U.S. economy into a recession. Trump announced the suite of tariffs last week and markets responded with their worst downturn since March 2020 at the onset of the Covid-19 pandemic.
Trump’s retaliatory tariff rates for countries that he labeled the “worst offenders” were based primarily on the total U.S. trade deficit with those countries, rather than on their tariff rates. Trump believes trade deficits mean the U.S. is getting ripped off, dismissing the argument made by economists that trade deficits represent varying consumer demands and specialization of production across different countries.
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