President Donald Trump has stunned global markets with a sweeping shift in his tariff policy, offering a 90-day pause for most countries hit by his recent trade offensive—while ramping up pressure on China in an escalating economic confrontation.
Just hours after broad-based US tariffs kicked in on roughly 60 trading partners, Trump declared a universal “lowered reciprocal tariff” of 10% on imports from nations that have not retaliated. At the same time, he imposed a dramatic 125% levy on Chinese goods, accusing Beijing of a “lack of respect” after it threatened 84% tariffs on US imports.
Markets, initially rocked by fears of a global trade war, rebounded sharply. The S&P 500 surged 9.5% by close, while the Dow Jones jumped 7.8%. This turnaround followed a spike in US government debt yields to 4.5%—the highest since February—prompting concerns of inflation and recession.
Speaking on Truth Social, Trump justified the increased China tariff as a “necessary” step. “China will realise that the days of ripping off the USA are over,” he wrote. Treasury Secretary Scott Bessent denied the pivot was driven by financial turmoil, while critics like Democrat Chuck Schumer accused Trump of “reeling and retreating.”
Outside the White House, Trump defended his selective reprieve, saying, “People were getting yippy… this had to be done.”
The UK, already subject to the 10% baseline tariff, welcomed the de-escalation, with Downing Street saying, “A trade war is in nobody’s interests.” Yet the China-US standoff—now red-hot—shows no sign of cooling.
