In the midst of a market collapse brought on by trade battles, US President Donald Trump stated on Wednesday that he had approved a 90-day halt and a 10% reduction in the reciprocal tariff during the three-month truce. Additionally, President Trump declared that the United States had raised its tariffs on China to an astounding 125%.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A.” Donald Trump thumped on his Truth Social post.
The development caused a spike in global markets. Although the specifics of Trump’s proposals to lower tariffs on non-China trading partners were not immediately evident, the S&P 500 stock index increased by almost 7% following the statement.
Donald Trump also restated a White House assertion that the US president has received requests for a seat at the negotiating tables from a number of nations.
“Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”, Trump wrote on Truth Social.
For the majority of countries, the baseline tariff rate that took effect on Saturday was 10%. It’s far less than the 20% duty Donald Trump imposed on EU goods, the 24% tariff on Japanese imports, and the 25% tariff on South Korean goods.
However, 10% would be an increase over the duties that the US government had previously imposed.
A trade war between the two largest economies in the world was further stoked on Wednesday as China announced retaliatory duties of 84% on imports of US goods, matching higher tariffs imposed earlier in the day by US President Donald Trump.
The extensive “reciprocal” tariffs imposed by Donald Trump went into effect early on Wednesday. The country most severely affected was China, whose goods were now subject to a charge of at least 104%.
Auto tariffs in Canada now equal the 25% Washington charges. Following Trump’s 25% steel and aluminum tariffs, the EU approved fresh charges on US goods.
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