President Donald Trump announced Wednesday a 90-day suspension of certain targeted tariffs for all countries except China, which will now face a sharply increased tariff of 125%. The move marks the latest escalation in a trade saga that has shaken global financial markets for over a week. The blanket 10% U.S. tariffs on nearly all imports remain unchanged.
Markets rallied in response to the temporary relief, with all three major U.S. indexes soaring by early afternoon. The Nasdaq surged 12.16%, the S&P 500 jumped 9.52%, and the Dow climbed 7.87% by close.
Earlier in the day, both China and the European Union announced retaliatory measures. The Chinese Finance Ministry hiked tariffs on U.S. goods to 84%, up from a previously declared 34%, effective Thursday. Meanwhile, the EU imposed a first round of 25% duties on selected American products. While U.S. tariffs on EU imports stand at 20%—with even steeper rates on steel and autos—the EU’s countermeasures have so far remained relatively restrained, reducing their average duties to 10%.
At a press briefing, Trump justified the tariff pause by suggesting panic had set in among some parties, without naming specifics.
“People were jumping a little bit out of line,” he said. “They were getting a little bit yippy, a little bit afraid.”
Despite the broader pause, the administration’s hardline stance against China remains clear. Treasury Secretary Scott Bessent, speaking from the White House, called China a “bad actor” and warned against further retaliation.
“Do not retaliate and you will be rewarded,” Bessent said.
Trump’s previous round of tariffs included a staggering 104% duty on Chinese imports and individual levies of up to 50% on goods from more than 50 nations, which took effect at 12:01 a.m. Wednesday. Those nation-specific tariffs are now on hold, with China being the lone exception.
More developments:
- The World Trade Organization warned Wednesday that the escalating U.S.-China trade conflict could slash bilateral trade by as much as 80% and risk dividing the global economy into rival blocs.
- France revised its 2025 economic growth forecast down from 0.9% to 0.7%, citing the ripple effects of the trade war.
- Chinese authorities have begun censoring online discussions about the tariffs. Searches for terms like “tariff” and “104” were heavily restricted on the social media platform Weibo.
