Trump pauses higher tariffs for dozens of countries for 90 days, hikes China rate to 125%

US President Donald Trump has announced a 90-day pause on higher tariffs. This applies to many countries but increases tariffs on China to 125%. Earlier this month, he set a baseline tariff of 10% for all countries. Higher rates were planned for the "worst offenders." Now, the higher rates will be paused for 90 days.

Trump stated that the tariff rate for China will rise again. He cited "the lack of respect" China has shown to global markets. On Wednesday, China responded with an 84% tariff on US imports. This followed Trump's imposition of a 104% tariff on Chinese goods.

US Commerce Secretary Howard Lutnick shared details about Trump's announcement. He said he was present when Trump wrote the Truth Social post about the tariffs. Lutnick expressed optimism about global trade cooperation with Trump. He noted that China is taking a different approach.

Treasury Secretary Scott Bessent confirmed that Mexico and Canada are included in the new tariffs. Financial markets reacted positively to Trump's announcement of a tariff pause. The pause applies to countries that have not retaliated against the US.

Trump's statement emphasized China's unfair trade practices. He mentioned that over 75 countries have reached out to negotiate trade issues with the US. These include topics like tariffs and currency manipulation.

The new tariff on Chinese goods is effective immediately at 125%. Trump hopes China will recognize its unsustainable trade practices soon. Wall Street opened with mixed trading after these announcements.

Currently, the S&P 500 is up by 1.5%, and Dow Jones is up by 1.3%. The Nasdaq has increased by 2.4%. However, shares of pharmaceutical companies fell due to Trump's threats of tariffs against them.

Last year, trade between the US and China totaled around $585 billion (£429 billion). The US imported $440 billion from China while exporting only $145 billion back. This resulted in a significant trade deficit of $295 billion in 2024, which is about 1% of the US economy.

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