President Donald Trump announced a dramatic shift in his tariff strategy Wednesday, offering a 90-day pause with reduced rates for dozens of countries while simultaneously escalating trade tensions with China.
The White House revealed that for the next three months, most nations will face a universal 10% tariff instead of the higher “reciprocal” tariffs Trump had previously announced. This temporary reprieve, however, excludes China, which now faces an unprecedented 125% tariff rate on goods entering the United States.
Trump declared the pause on Truth Social, citing that “more than 75 Countries have called Representatives of the United States” to negotiate trade agreements. For these nations, Trump authorized “a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
The decision marks a strategic pivot just days after Trump’s sweeping global tariff policy triggered market turmoil and international backlash. Treasury Secretary Scott Bessent explained that Trump wants to be “personally involved” in negotiations over the tariffs. “Each one of these is going to be a separate, bespoke negotiation,” Bessent told reporters outside the White House.
For China, however, the trade conflict has only intensified. Trump cited “the lack of respect that China has shown to the World’s Markets” as justification for the 125% tariff rate, which took effect immediately. The dramatic increase came after Beijing refused to withdraw its own retaliatory tariffs against American goods.
China’s response was swift and defiant. The country announced it would raise its tariff on U.S. imports to 84%, up from the previous 34% rate, and filed a complaint with the World Trade Organization alleging violations of international trade laws. In a strongly worded statement, China’s commerce ministry vowed to “fight till the end if the U.S. side is bent on going down the wrong path.”
Global markets have been on a roller coaster since Trump’s initial tariff announcements last week. U.S. stocks plummeted Friday after China’s first round of retaliatory tariffs, with oil falling to pandemic lows and European stocks suffering their worst session in eight months. Markets rebounded slightly on news of the 90-day pause, though uncertainty remains.
When asked if the 90-day pause was implemented because of market volatility, Bessent dismissed the suggestion. “No, it’s because of the large number of inbounds — we’ve had more than 75 countries contact us, and I imagine after today, there will be more,” he said.
Unlike China, many U.S. trading partners have opted to avoid immediate retaliation, choosing instead to pursue negotiations. Taiwan’s President Lai Ching-te said Taiwan “has no plans to adopt retaliatory tariffs,” while countries like India, Japan and South Korea have also refrained from countermeasures.
The European Union, however, has taken a tougher stance. The EU voted to impose new tariffs on the United States affecting €20.9 billion (£18 billion) worth of goods, to be implemented in three stages throughout the year starting April 15.
Economic experts remain concerned about the long-term impact of the tariff policies. The Bank of England warned that the reciprocal tariffs alongside retaliatory measures have “contributed to a material increase in the risks to global growth and a weakening of the central outlook, as well as increased uncertainty over the outlook for inflation globally.”
Many American businesses are already feeling the effects. Mortgage rates hit their highest level in more than a month amid continued uncertainty, with the average 30-year fixed mortgage rate climbing 25 basis points over two days to 6.85%, according to Mortgage News Daily.
Home Depot co-founder Ken Langone blasted Trump’s tariffs, calling the 46% import duties on Vietnam “bullshit” and describing the 34% tariff rate on China as “too aggressive, too soon.”
The White House continues to frame the tariff strategy as necessary for protecting American interests and pressuring trading partners into fairer practices. For now, the 90-day window provides breathing room for negotiations while keeping the pressure on China in what has become an increasingly intense trade conflict.
Trump has urged American companies to use this opportunity to relocate production to the U.S. In his first comments after China’s announcement of higher tariffs, Trump told businesses now is a “great time” to move to the United States.
As countries scramble to negotiate during the 90-day window, the global economic landscape hangs in the balance, with potential far-reaching consequences for supply chains, consumer prices, and international relations.