US President Donald Trump on Wednesday announced a 90-day pause on his sweeping tariffs on all countries, barring China – a move that seemed nearly impossible just 24 hours ago. According to Trump, who had introduced the slew to tariffs to address the alleged trade imbalance with the US, over 75 countries had negotiated and not retaliated against him – which led to the pause. During the 90 days, a significantly reduced reciprocal tariff of just 10 per cent would be in effect, he said.
For China, however, Trump announced an immediate increase tariffs on China to 125 per cent, up from the previously declared 104 per cent.
“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 US and other countries, is no longer sustainable or acceptable,” he wrote on Truth Social.
“China wants to make a deal. They just don’t know how quite to go about it…President Xi Jinping is a proud man. They don’t know quite how to go about it, but they’ll figure it out,” he added.
Why did Trump hit a pause on tariffs?
For days, fellow Republicans and business executives had been insisting the US President to stop the tariffs, given the fear of a major trade war, triggering a global market meltdown, and raising concerns of a looming global recession. However, he stayed put, saying, “My policies will never change”.
By Wednesday, it had become clear that the campaign to convince Trump to go back on the tariffs would not change as they had come into effect.
However, a growing alarm inside the Treasury Department over the developments in the bond market was the only factor that made Trump hit a pause on his reciprocal tariff regime, reported CNN. According to the report, US Treasury Secretary Scott Bessent raised the concerns to Trump, while White House economic officials briefed him on the accelerating selloff in the US Treasury market.
As Trump addressed reporters after the announcement of the pause on tariffs – it indicated that the decision was more of an impulse-driven one rather than a mapped-out strategy.
“The bond market is very tricky, I was watching it. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy. We didn’t have access to lawyers, or it was just wrote up. We wrote it up from our hearts, right? It was written from the heart, and I think it was well written too, but it was written from the heart,” he said.
“I thought that people were jumping a little bit out of line…They were getting yippie, you know, they were getting a little bit a little bit afraid. You have to be flexible,” he said.