US President Donald Trump has made a significant shift in trade policy, announcing a 90-day pause on tariffs for countries that did not retaliate. However, he increased tariffs on Chinese imports to 125%, heightening tensions in an ongoing trade war with China.
Trump’s dramatic policy shift came hours after new tariffs hit 60 trading partners after he authorized a universal 10% tariff during ongoing negotiations. Meanwhile, China’s tariffs on US imports rose to 84%, sparking further tension following Trump’s recent decision to impose taxes on all US imports. The policy set a baseline tariff of 10%, with higher rates for “worst offenders” like the EU and Vietnam. Market turmoil ensued, with trillions in losses worldwide.
Before the suspension, US interest rates spiked to 4.5%. Post-announcement, US shares surged, with the S&P 500 up 7% and the Dow Jones rising 7.8%. Trump’s policy aims to pressure China into fairer trade practices.
US-China Trade War Escalates
Trump’s additional tariff on China took immediate effect in the hope that China will realize its past practices are unsustainable. US Treasury Secretary Scott Bessent denies global market falls influenced the policy change.
The UK, unaffected by the changes, advocates for calm, though the WTO warns of substantial risks if tensions escalate. The EU’s retaliatory tariffs, set for 15 April, remain capped at 10% as Canada and Mexico are exempt from the baseline tariff.
Trump’s tariff strategy continues to shape global trade dynamics but the outcome remains uncertain as negotiations proceed.
