Donald Trump has announced a full 90-day suspension of all newly imposed “reciprocal” tariffs—except those targeting China—in a surprising shift from his earlier hardline stance. While most countries will see their tariff rates return to a standard 10%, tariffs on Chinese imports will not only remain but increase from 104% to 125%, following China’s move to impose retaliatory duties on U.S. goods.
In a social media post, Trump justified the hike, citing China’s “disrespect” for global markets and pledging that the era of the U.S. being “ripped off” was over. Speaking later to the press, he said China wants a deal but is unsure how to proceed. He also emphasized the need for “flexibility,” a notable departure from his previous unwavering support for tariffs.
The White House clarified that Mexico and Canada will continue to face 25% tariffs unless products meet USMCA requirements. Sector-specific tariffs remain unaffected.
Markets responded positively, with major indexes soaring—led by the Nasdaq’s 12.2% gain—as investors welcomed a break from escalating trade tensions. Trump’s earlier social media encouragement to “BUY!!!” appeared to foreshadow the rally. His media company, DJT, also saw its stock jump over 20% in a single day.
Treasury Secretary Scott Bessent later framed the pause as part of a long-term strategy and said Trump will be directly involved in ongoing negotiations. However, U.S. Trade Representative Jamieson Greer revealed he wasn’t informed of the decision until after it went public.
Though the move temporarily eased market fears, experts say it may only delay a potential recession. Economists still warn that businesses face uncertainty, particularly with 10% tariffs now serving as a baseline and elevated duties on China and key industries remaining intact.
Beijing condemned the tariff hike, calling it a “grave mistake” and vowed to retaliate further. Trade tensions remain high, with both sides showing little sign of backing down in what some fear could escalate into a prolonged economic standoff.
