Trump Pauses Global Tariffs, hit China with 125%

The United States has decided to pause its higher import tariffs for most countries, but it's taking a much tougher stand on China. President Donald Trump announced a 90-day break for nations that didn't retaliate after his new tariffs were introduced. However, he raised tariffs on Chinese goods to 125%, blaming China for what he called a “lack of respect.” The move came just a few days after Trump shocked the global economy by placing tariffs on all goods entering the US, creating one of the biggest changes in international trade in recent times.

The decision marks a major shift in Trump's original trade plan. Initially, the US imposed a 10% baseline tariff on all imports. But it also planned higher rates for countries seen as unfair trading partners. These higher tariffs, some going beyond 100%, were supposed to target countries like the European Union, Vietnam, and South Africa. Now, those countries are getting a temporary break—unless they choose to strike back with China tariff increase

Trump’s New Trade Rules

Trump’s trade strategy began with a universal 10% tariff on all imports. This was meant to be a starting point. Countries that the White House called the “worst offenders” were going to face extra tariffs, from 11% to even more than 100%. This list included 60 of America's trading partners. The goal, according to Trump, was to fight what he saw as unfair trade practices that hurt the American economy and jobs.

However, the policy changed just hours after the new tariffs came into effect. Trump said he would pause the higher tariffs for 90 days, but only for countries that didn’t fight back. He announced this shift through a post on his platform, Truth Social. He said he wanted to give countries a chance to negotiate, but warned that those who retaliated—like China—would face even stronger measures.

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China Hit with a 125% Tariff

Trump comes with 125% China tariffs While most countries received a break, China did not. In fact, the US increased its tariffs on Chinese goods to a shocking 125%. This followed China’s move to place 84% tariffs on US goods, in response to earlier US measures. The trade fight between the two nations has been growing rapidly. Earlier this year, the US had already placed 20% tariffs on Chinese goods. Then it added another 34%, which led to similar action from China.  

When China didn’t back down, Trump raised tariffs again—this time threatening to go as high as 104%. China responded by raising its tariffs to 84%, making it clear that it would not step aside. Now, the total US tariff on Chinese goods has jumped to 125%. Trump said this move was necessary because China kept taking advantage of the US. He also said that he hoped President Xi Jinping would want to reach a deal soon.

Markets Respond to the Changes

Trump trade policy moves caused a rollercoaster in the markets. Before he announced the pause on tariffs, investors were worried. Interest rates on US government debt rose to 4.5%—the highest level since February. That sign of stress caused fear among economists and traders. Many warned that these trade tensions could lead to a recession or major price hikes.

But when Trump shared news of the 90-day pause for non-retaliating countries, the mood shifted. US stocks soared. The S&P 500 rose 7% during the afternoon and closed the day up by 9.5%. The Dow Jones also went up by nearly 8%. Trump said his decision to offer a pause was the smart move. He added that he made the change because people were getting “yippy”—a term he used to describe panic or complaints.

Still, reactions in Washington were mixed. Treasury Secretary Scott Bessent said the change had nothing to do with falling markets. But critics disagreed. Democratic leader Chuck Schumer said Trump was “reeling and retreating” under public and market pressure.

Global Reactions and What Lies Ahead

The trade war has caused concern across the world. In the UK, which wasn’t affected by the recent changes because it was already on the 10% list, a spokesperson said trade wars help no one. A government source in London said that the situation showed why staying calm and avoiding retaliation could be the better path.

The World Trade Organization (WTO) gave a serious warning. Its head, Dr Ngozi Okonjo-Iweala, said global trade could take a major hit if the US and China continued to fight. She said their trade alone could fall by 80%, which equals around $466 billion. She urged both countries to focus on negotiation, not conflict.

Meanwhile, some US tariffs already in place remain unchanged. These include a 25% tax on imported cars and car parts, which began on April 2. There's also a 25% tariff on steel and aluminium imports. The European Union, which had planned to hit back on April 15, was included in the 90-day pause since it hadn’t acted yet.

Canada and Mexico, two of the US’s top trading partners, were never part of the baseline 10% tariff and will remain exempt for now.

The Way of Uncertainty

The US trade policy has shifted quickly, and more changes could come soon. Most countries now have 90 days of relief from higher tariffs. China, however, faces its biggest challenge yet with the 125% tariff now in place. Talks may still happen, but for now, the world is watching a growing divide between two of the biggest economies. Whether this fight leads to a deal—or more damage—remains to be seen

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