Donald Trump has paused his so-called “reciprocal” tariffs on most of America’s trading partners for 90 days – while increasing those on China to 125%.
There have been fears of a global recession and stock markets around the world had plummeted after Mr Trump announced his “Liberation Day” tariffs on Wednesday 2 April.
However, the S&P 500 stock index jumped 9.5% and global markets bounced back following Mr Trump’s announcement on Wednesday that the increased tariffs on nearly all trading partners would now be paused.
Tariffs latest: Trump gives reasons for pausing some tariffs
In a post on his Truth Social platform, Mr Trump said the “90-day pause” was for the “more than 75 countries” who had not retaliated against his tariffs “in any way”.
He added that during this period they would still have to pay a “substantially lowered” 10% tariff, which is “effective immediately”.
It is lower than the 20% tariff that Mr Trump had set for goods from the European Union, 24% on imports from Japan and 25% on products from South Korea.
The UK was already going to face a blanket 10% tariff under the new system.
Mr Trump said the increased 125% tariff on imported goods from China was “effective immediately”.
He added: “At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable.”
What’s in Trump’s tariff pause?
Here’s what Donald Trump’s tariff pause entails:
‘Reciprocal’ tariffs on hold
• Higher tariffs that took effect today on 57 trading partners will be paused for 90 days
• These include the EU, Japan and South Korea, all of which will face a baseline 10% duty instead
• Countries that already had a 10% levy imposed since last week – such as the UK – aren’t affected by the pause
China tariffs increased
• Trump imposed a higher 125% tariff on China
• That’s in addition to levies he imposed during his first term
• China had hit the US with 84% tariff earlier today, following tit-for-tat escalations
No change for Canada or Mexico
• Canadian and Mexican goods will remain subject to 25% fentanyl-related tariffs if they don’t comply with the US-Mexico-Canada trade agreement’s rules of origin
• Compliant goods are exempt
Car and metal tariffs remain
• Trump’s pause doesn’t apply to the 25% tariffs he levied on steel and aluminium in March and on cars (autos) on 3 April
• This 25% tariff on car parts does not come into effect until 3 May
Sectors at risk
• Copper, lumber, semiconductors, pharmaceuticals and critical minerals are expected to be subject to separate tariffs, in the same way autos are
Hours after Mr Trump announced the pause on tariffs for most countries, a White House official clarified that this did not apply to the 25% duties imposed on some US imports from Mexico and Canada.
The tariffs were first announced in February and Mexico and Canada were not included in the “Liberation Day” announcements.
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1:29 Donald Trump says China ‘wants to make a deal’
Hours before the 125% tariff on China was revealed, Beijing said it was increasing tariffs on US goods by 50%.
It meant tariffs of 84% would be enforced on US goods – up from the 34% China had previously planned.
Image: Mr Trump spoke to reporters in the Oval Office. Pic: Reuters
China ‘want to make a deal’
Asked why he posted “BE COOL” on Truth Social hours before announcing his tariff pause, Mr Trump told reporters at the White House: “I thought that people were jumping a little bit out of line.”
“They were getting yippy, you know, were getting a little bit yippy, a little bit afraid,” he added.
Mr Trump continued: “China wants to make a deal, they just don’t know how to go about it.
“[They’re] quite the proud people, and President Xi is a proud man. I know him very well, and they don’t know quite how to go about it, but they’ll figure it out.
“They’re in the process of figuring out, but they want to make a deal.”
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White House press secretary Karoline Leavitt said the walk back was part of a grand negotiating strategy by Mr Trump.
“President Trump created maximum negotiating leverage for himself,” she said, adding that the news media “clearly failed to see what President Trump is doing here”.
US Treasury Secretary Scott Bessent also insisted Mr Trump had strengthened his hand through his tariffs.
“President Trump created maximum negotiating leverage for himself,” he said.
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Mr Bessent said Mr Trump decided to raise tariffs on China because Beijing hadn’t reached out to the US and instead increased its own levies on US goods.
Downing Street said that the UK will “coolly and calmly” continue its negotiations with the US.
A Number 10 spokeswoman said: “A trade war is in nobody’s interests. We don’t want any tariffs at all, so for jobs and livelihoods across the UK, we will coolly and calmly continue to negotiate in Britain’s interests.”
