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Trump backs down on tariffs for most nations for 90 days, raises China tariffs to 125%
Public Lokpal
April 10, 2025
Trump backs down on tariffs for most nations for 90 days, raises China tariffs to 125%
Washington: Facing a global market meltdown, President Donald Trump on Wednesday abruptly backed down on his tariffs on most nations for 90 days, but raised the tax rate on Chinese imports to 125 per cent.
It was seemingly an attempt to narrow what had been an unprecedented trade war between the US and most of the world to a showdown between the US and China.
The S&P 500 stock index jumped nearly 7 per cent after the announcement, but the precise details of Trump's plans to ease tariffs on non-China trade partners were not immediately clear.
Trump posted on Truth Social that because “more than 75 Countries” had reached out to the US government for trade talks and have not retaliated in meaningful way “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10 per cent, also effective immediately.”
The 10 per cent tariff was the baseline rate for most nations that went into effect on Saturday. It's meaningfully lower than the 20 per cent tariff that Trump had set for goods from the European Union, 24 per cent on imports from Japan and 25 per cent on products from South Korea.
Still, 10 per cent would represent an increase in the tariffs previously charged by the US government.
The announcement came after the global economy appeared to be in open rebellion against Trump's tariffs as they took effect Wednesday, a signal that the US president was not immune from market pressures.
Business executives were warning of a potential recession caused by his policies, some of the top US trading partners are retaliating with their own import taxes and the stock market is quivering after days of decline.
White House press secretary Karoline Leavitt said the walk back was part of some grand negotiating strategy by Trump.
But market pressures had been building for weeks ahead of Trump's move.
Particularly worrisome was that US government debt had lost some of its luster with investors, who usually treat Treasury notes as a safe haven when there's economic turbulence.
Government bond prices had been falling, pushing up the interest rate on the 10-year US Treasury note to 4.45 per cent. That rate eased after Trump's reversal.
But by unilaterally imposing tariffs, Trump is exerting extraordinary influence over the flow of commerce, creating political risks and pulling the market in different directions based on his remarks and social media posts.
There still appear to be 25 per cent tariffs on autos, steel and aluminum, with more imports set to be tariffed in the weeks ahead.
What's not yet known is what Trump does with the rest of his tariff agenda. In a Tuesday night speech, he said taxes on imported drugs would happen soon.
AFP
