US President Donald Trump said Wednesday he will pause most tariffs for 90 days and temporarily lower reciprocal trade duties to 10%, but sharply increased tariffs on China to 125%, citing Beijing’s “lack of respect” for global markets.
The announcement, made via a post on Trump’s Truth Social account, triggered a dramatic rebound in US equity markets. The S&P 500 surged more than 7%, the Nasdaq rallied nearly 9%, and the Dow Jones Industrial Average jumped over 2,400 points, or more than 6%, in afternoon trading.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump wrote.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” he added.
At the same time, Trump said the U.S. would implement a 90-day “pause” on tariffs for other trading partners and reduce the reciprocal tariff rate to 10% during the period. He cited efforts by more than 75 countries to engage with US officials—including representatives from the Commerce Department, Treasury, and US Trade Representative’s office—to address ongoing disputes over trade, currency policy, and non-monetary barriers.
'Relief rally'
Trump’s remarks came as global markets faced steep losses in recent weeks amid fears of escalating trade tensions and slowing economic growth. The sharp divergence between China and other nations in Wednesday’s statement underscored the administration’s toughening stance toward Beijing while offering relief to other trading partners.
The US 10-year Treasury yield also spiked in reaction to the news, briefly touching 4.5% and marking its largest three-day increase since 2001.
Trump did not clarify whether the 125% tariff on Chinese goods would apply across all categories or target specific imports, nor did he indicate whether talks with Chinese officials were continuing.
IG market analyst Chris Beauchamp called the market reaction “the biggest relief rally since Covid.”
“It looks like the president has finally bowed to pressure, though in his inimitable style he is spinning it as a generous gesture to the world in response to others approaching Washington for negotiations,” Beauchamp commented.
“The size of the surge shows how desperate investors were for a deal, and gives hope that there is light at the end of the tunnel.”