Global markets rebound after Trump tariff reversal, but US-China trade war escalates

Financial markets in Asia rallied on Thursday. This followed US President Donald Trump's announcement. He announced a temporary easing of tariffs for most countries. There will be a 90-day pause in enforcement.

However, tensions with China remain high. The US imposed a steep 125% tariff on Chinese goods. Beijing quickly retaliated against this move.

The reversal comes after days of financial turmoil. This turmoil was caused by escalating trade tensions. Trump’s 10% universal levy on imports will stay in place. However, affected nations now have three months to renegotiate terms.

The trade standoff between the US and China took a sharp turn. Trump cited a “lack of respect” from China for his actions. He defended the unprecedented 125% tariff hike on Chinese imports. In response, Beijing implemented an 84% retaliatory tariff on all US goods.

Despite these tensions, Wall Street surged on Wednesday. Major indices posted historic single-day gains. This optimism spread to Asia's markets as well. Japan, Taiwan, and South Korea saw significant recoveries.

President Trump spoke at a Nascar-themed event at the White House. He expressed hope for future deals with trading partners. “What a day, but more great days coming,” he said early Thursday.

He vowed that “fair deals” would be reached with all partners. Our North America correspondent reports that the tariff reprieve may indicate a tactical shift by the White House. However, the deepening rift with China suggests that resolving the trade war is still far off.