President Donald J. Trump announced a significant shift in his trade policy on Wednesday, reducing tariffs on most U.S. imports to a flat 10% and suspending steeper levies on dozens of countries for 90 days.
In a striking exception, tariffs on Chinese goods were raised to 125%, escalating tensions with Beijing and reshaping the global economic landscape.
The decision, detailed in a statement on Truth Social and elaborated upon in brief remarks to reporters, follows a tumultuous week in which Mr.
Trump’s initial tariff plan unveiled April 2 and implemented at midnight Wednesday—sent markets into a tailspin.
That earlier policy imposed a baseline 10% tariff on all imports, with “reciprocal” rates ranging from 11% to 50% targeting nearly 90 countries based on their own trade barriers. The result was a $6.6 trillion loss in global stock market value and a surge in U.S. bond yields to 4.5%, prompting urgent calls from trading partners.
Citing diplomatic outreach from more than 75 countries, Mr. Trump authorized the 90-day pause and tariff reduction to 10%, effective immediately, for most nations. “They’ve agreed to negotiate a solution,” he wrote, urging allies to refrain from retaliatory measures. Treasury Secretary Scott Bessent described the move as a calculated step to foster trade talks, with delegations from Japan, Israel, and other nations already preparing to visit Washington.
Canada and Mexico, however, remain subject to separate 25% tariffs linked to border security concerns, though goods compliant with the U.S.-Mexico-Canada Agreement are exempt.
China, by contrast, faces a sharply intensified penalty. After Beijing retaliated Wednesday with an 84% tariff on U.S. export, Trump pushed the rate to 125%.
The White House framed the increase as a response to China’s unwillingness to engage constructively, with Commerce Secretary Howard Lutnick stating on X that Beijing had “chosen the opposite direction” from global cooperation.
The administration signaled that further measures could follow if China does not alter its stance.
Financial markets welcomed the broader tariff relief. The S&P 500 surged 9.5%, its largest single day gain since 2008, while the Nasdaq climbed 12.2%. Shares of import-heavy companies like Wayfair and Nike rose 20% and 10%, respectively. Oil prices increased by 4%, and Asian markets followed suit Thursday, with Japan’s Nikkei up 9% despite uncertainty over China’s next moves.
Beijing condemned the U.S. escalation, with Foreign Ministry spokesperson Lin Jian calling it an “abuse of tariff power” and promising unspecified countermeasures. State media warned of potential restrictions on American agricultural goods and cultural exports, raising fears of a deeper rupture in the $575 billion U.S.-China trade relationship.
Domestically, the policy shift drew varied reactions. Congressional Democrats, including Senator Chuck Schumer of New York, accused Mr. Trump of backtracking under pressure, while some Republican allies praised the flexibility as strategic.
Business leaders expressed cautious optimism but noted that even a 10% tariff could strain supply chains and raise consumer prices over time.
