U.S. President Donald Trump on Wednesday announced a 90-day pause of all recently imposed “reciprocal” tariffs—except those on China—in a surprising shift from his previously firm stance on maintaining historically high tariff rates.
125% Levies On China
Tariffs on China, however, are set to rise. Trump stated that reciprocal tariffs would increase from 104% to 125% following China’s decision to impose additional retaliatory duties on U.S. goods earlier in the day. For all other nations affected by Wednesday’s reciprocal tariffs, the rates will return to a standard 10%.
“In light of China’s continued disregard for global market fairness, I am raising U.S. tariffs on Chinese imports to 125%, effective immediately,” Trump wrote on social media. He added that China would eventually realize that exploiting the U.S. and other nations is no longer acceptable.
‘Nothing Over Yet’
Speaking to reporters after the announcement, Trump clarified that negotiations were still ongoing. “Nothing’s over yet,” he said. “China wants a deal—they just haven’t figured out how to make one.”
A White House official told CNN that Mexico and Canada are exempt from the 10% tariffs. Most goods from those countries will still face a 25% tariff unless they comply with the US-Mexico-Canada Agreement. Sector-specific tariffs remain unaffected by this exemption.
Markets Respond
Financial markets responded positively to the partial tariff rollback. The Dow Jones Industrial Average surged nearly 3,000 points (7.87%) on Wednesday. The S&P 500 rose 9.5%, while the Nasdaq climbed 12.2%—marking its best day since January 2001. It was also the strongest single-day performance for the S&P 500 since October 2008 and for the Dow in five years.
The market rebound followed days of losses fueled by concerns over Trump’s earlier tariff threats. Just hours before his announcement, Trump had posted online, “THIS IS A GREAT TIME TO BUY!!!”
He signed off the post with “DJT,” referencing Trump Media & Technology Group Corp, which trades under the ticker “DJT.” The company’s stock, down nearly 13% earlier in the month, jumped over 20% on Wednesday following the news.
Trump Yields To Pressure
Trump later told reporters that the decision to pause tariffs was partly in response to public pressure, saying, “People were getting a little yippy yappy.”
He emphasised the importance of adaptability, signalling a notable reversal from the administration’s earlier hardline rhetoric.
