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USA President Donald Trump on Wednesday backed off his tariffs on most countries for 90 days after facing a global market meltdown. But he increased the tax rate on Chinese imports, which is up to 125%.
It was done to narrow what had been an unprecedented trade war between the US and most of the world to a showdown between the US and China.
The S&P 500 stock index increased to 9.5% after the announcement, but the drama over Trump’s tariffs is far from over as the administration prepares to engage in nation-by-nation negotiations. Meanwhile, countries subject to the pause will now be tariffed at 10%.
Donald Trump pushed after the intense pressures created by the volatile financial markets that have been pushing the president to reconsider his tariffs, even as some insisted that his reversal had always been the plan.
The global economy seemed to be in revolt against Trump’s tariffs as they took effect early Wednesday, a clear signal that Trump was not immune from market pressure. In the afternoon, he posted on Truth Social that since over 75 nations had reached out to the US government for trade talks but it had not retaliated meaningfully, he had authorized a 90-day pause.
Trump later told reporters he pulled back on many global tariffs but not on China because people were afraid due to the stock market crash.
In his social media post, Trump further said that based on the lack of respect that China has shown the global market, I am increasing the tariff charged to China by the US to 125% effective immediately. He further said, hopefully, in the coming days, China will realize that the days of ripping off the US and other nations are no longer acceptable.
