US Pauses Global Tariffs, Doubles Down on China
The US suspends high tariffs for most nations, sparking market recovery, but hits China harder with 125% levies amid trade tensions.
US Softens Tariffs Globally but Escalates Trade Fight with China
In a move that stunned global markets, President Donald Trump walked back on aggressive trade measures just hours after they took effect, pausing elevated tariffs for most US trading partners—but doubling down on China with even harsher penalties. While this partial retreat offered temporary relief to shaken investors, it signaled a deepening rift between the world’s two largest economies.
A 90-Day Reprieve: Market Calm Restored
The dramatic announcement came after the US imposed sweeping import taxes on over 60 countries, sending global markets into disarray. Stocks plummeted, consumer anxiety surged, and experts warned of a looming recession. But within hours, Trump took to Truth Social to declare a 90-day pause on higher tariffs for countries that had not retaliated against American levies.
This shift included trading blocs like the European Union, Vietnam, and South Africa—all previously facing tariffs as high as 100%. Trump framed the pause as a strategic incentive for continued negotiations. “If you don’t retaliate, you get a better deal,” he stated, emphasizing a new flat “reciprocal” rate of 10% during ongoing discussions.
Markets responded with relief. The S&P 500 surged 9.5% by close, and the Dow climbed 7.8%—reversing massive losses from earlier in the week. Yet the sudden pivot also raised questions about the administration’s policy consistency.
China Targeted with Harshest Tariffs Yet
While most of the world got a reprieve, China found itself squarely in Trump’s crosshairs. In response to Beijing’s retaliatory 84% tariffs on US goods, the administration imposed a staggering 125% tariff on Chinese imports.
Calling China’s response disrespectful, Trump said, “China will soon realize that their days of exploiting the US are over.” He added that if Beijing continues to “provoke,” the penalties would only intensify.
The escalation follows months of rising tensions. Earlier this year, Trump had already imposed a 20% tariff on Chinese goods. Beijing responded with matching rates, prompting Trump to hike tariffs again by 34%—only for China to raise theirs to 84% in a retaliatory strike. Now, the stakes have reached new heights, with bilateral trade potentially plummeting by as much as 80%, according to the World Trade Organization.
WTO Director-General Dr. Ngozi Okonjo-Iweala warned, “Our assessments highlight the substantial risks of further escalation.” A trade collapse of this scale could strip nearly half a trillion dollars from the global economy.
Political Reactions: Strategic Shift or Retreat?
Trump’s abrupt course correction drew mixed reactions. US Treasury Secretary Scott Bessent denied that the tariff pause was influenced by market turmoil. However, Senate Majority Leader Chuck Schumer labeled the move as “reeling and retreating.”
Speaking outside the White House, Trump defended the decision. “People were getting yippy,” he said. “This had to be done. China retaliated, so we hit back harder. But others played fair, so we’re easing up on them—for now.”
His administration excluded Canada and Mexico from the baseline 10% tariff, signaling the importance of North American trade alliances. The UK, which was already subject to the 10% rate, remained unaffected by the new pause.
Europe Treads Carefully Amid Trade Shifts
The European Union, initially bracing for customized tariffs of up to 20%, now finds itself in a better position thanks to its delayed retaliation. The bloc had approved retaliatory tariffs set to take effect on April 15, but Trump’s pause came just in time.
A spokesperson for UK Prime Minister Rishi Sunak noted that a trade war “serves no one’s interest,” while EU officials privately acknowledged that patience had paid off.
Still, not all tariffs were frozen. The White House confirmed that 25% duties on foreign car imports and all steel and aluminum remain active. These earlier measures, introduced in April, continue to affect a range of global suppliers.
The Bigger Picture: A Calculated Gamble?
Experts view this strategy as high-risk, high-reward. “The selective rollback appears tactical,” said Jennifer Wu, a senior analyst at the Peterson Institute for International Economics. “It gives the US leverage while keeping the pressure on China.”
Yet the gamble could backfire. A prolonged standoff with China might disrupt global supply chains, spike consumer prices, and dent investor confidence—especially if Beijing escalates further. Already, the US debt market has seen yields jump to 4.5%, the highest since February, as investors brace for uncertainty.
With elections looming and economic indicators flashing red, Trump’s tariff gamble could shape not just foreign trade—but the broader trajectory of the US economy.
Final Thoughts: The Road Ahead in Global Trade
As the dust settles, one thing is clear: the US is recalibrating its global trade stance with precision and unpredictability. While most nations enjoy a temporary breather, China faces an intensified economic onslaught.
Whether this approach yields meaningful reform or spirals into prolonged conflict remains to be seen. For now, businesses, investors, and consumers must navigate a world where trade policy can change overnight—and where global cooperation hangs in the balance.
Disclaimer:
The content of this article is for informational and journalistic purposes only. It does not constitute financial, legal, or investment advice. While efforts have been made to ensure accuracy and current relevance, readers are encouraged to consult qualified professionals or official government sources for decisions related to trade, tariffs, or economic policy. The views expressed do not represent any official stance and are based on publicly available information at the time of writing.
source : BBC