President Donald Trump announced a complete three-month pause on all the “reciprocal” tariffs that went into effect at midnight, with the exception of China, a stunning reversal from a president who had insisted historically high tariffs were here to stay, Skynewsreports.
But enormous tariffs will remain on China, the world’s second-largest economy. In fact, Trump said they will be increased to 125% from 104% after China announced additional retaliatory tariffs against the United States earlier Wednesday.
“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,” Trump said in his social media post. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other countries, is no longer sustainable or acceptable,” he wrote.
Wall Street breathed a sigh of relief, however, that Trump was backing down on other extreme trade measures. Stocks rallied sharply on the news — even though the 10% universal tariff on all imports coming into the United States remained in effect.
Trump in a Truth Social post Wednesday said he has “authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
Shortly after the announcement, Treasury Secretary Scott Bessent said the pause was part of “his strategy all along.” But he also said that Trump had “great courage to stay the course until this moment.”
CNN previously reported that Bessent traveled to Mar-a-Lago on Sunday to discuss the tariffs with Trump, encouraging him to focus on an agenda of reaching new trade terms with countries.
Bessent said Trump would be “personally involved” in all the discussions as he seeks out concessions.
“No one creates leverage for himself like President Trump,” Bessent said.
The message sought to cast to other countries was: “Do not retaliate and you will be rewarded,” he said, adding that the move “signals that President Trump cares about trade and that we want to negotiate in good faith.”
He and Commerce Secretary Howard Lutnick were with Trump when he sent his message on Truth Social, Lutnick confirmed on a post on X.
“Scott Bessent and I sat with the President while he wrote one of the most extraordinary Truth posts of his Presidency,” Lutnick said. “The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction.”
Stocks rocketed higher on the news, with the Dow surging 2,200 points, or 5.9%. The S&P 500 rose 6.5% and the Nasdaq was more than 8% higher. Markets have been getting slammed by the prospect of the significantly higher tariffs Trump laid out last week.
Bessent didn’t offer many details on what could happen after the 90-day pause, but he said the administration will continue to have discussions with other countries in the region. For example, he said US government officials are meeting with representatives from Vietnam on Wednesday.
