Why Trump Put a 90-Day Pause on Tariffs for All Countries — but Not for China
In a dramatic move, former U.S. President Donald Trump announced a 90-day pause on tariffs for all countries—excluding China, which now faces an immediate tariff increase to 125%, up from the earlier 104%. The announcement comes amid growing global concerns over trade tensions and their impact on markets.
Trump stated that more than 75 countries had negotiated or refrained from retaliating against his tariff policy, which led him to temporarily ease the pressure. For the next 90 days, a reduced reciprocal tariff of 10% will be in effect for all nations except China.
However, Trump took a hard line on Beijing."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. At some point, hopefully in the near future, China will realize that the days of ripping off the US and other countries, is no longer sustainable or acceptable," Trump posted on Truth Social.
He added, "China wants to make a deal. They just don't know how quite to go about it...President Xi Jinping is a proud man. They don't know quite how to go about it, but they'll figure it out."
Why the Sudden Shift?
While Trump initially resisted calls to reverse his tariff strategy, pressure from business leaders and Republicans grew stronger over fears of a global market collapse and recession. Yet, it was internal alarm at the U.S. Treasury Department—especially concerns from Treasury Secretary Scott Bessent about a bond market selloff—that reportedly made Trump reconsider.
Trump later admitted the decision came from instinct rather than legal planning. "The bond market is very tricky, I was watching it. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy. We didn't have access to lawyers, or it was just wrote up. We wrote it up from our hearts, right? It was written from the heart, and I think it was well written too, but it was written from the heart," he told reporters.
Market Reactions
Wall Street responded with jubilation. The Dow Jones jumped over 2,500 points, posting nearly an 8% gain. The Nasdaq surged 12.2%, its best day in 24 years, while the S&P 500 climbed 6% to 5,281.44. Oil prices also rose over 4%, and the U.S. dollar strengthened.
India’s Relief
India, which has been impacted by a 26% reciprocal tariff on its exports to the U.S., is expected to benefit from the pause. The move offers breathing space for Indian markets and policymakers. MEA spokesperson Randhir Jaiswal confirmed that discussions are ongoing toward finalizing a mutually beneficial trade agreement between India and the U.S.
Trump stated that more than 75 countries had negotiated or refrained from retaliating against his tariff policy, which led him to temporarily ease the pressure. For the next 90 days, a reduced reciprocal tariff of 10% will be in effect for all nations except China.
However, Trump took a hard line on Beijing."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. At some point, hopefully in the near future, China will realize that the days of ripping off the US and other countries, is no longer sustainable or acceptable," Trump posted on Truth Social.
He added, "China wants to make a deal. They just don't know how quite to go about it...President Xi Jinping is a proud man. They don't know quite how to go about it, but they'll figure it out."
Why the Sudden Shift?
While Trump initially resisted calls to reverse his tariff strategy, pressure from business leaders and Republicans grew stronger over fears of a global market collapse and recession. Yet, it was internal alarm at the U.S. Treasury Department—especially concerns from Treasury Secretary Scott Bessent about a bond market selloff—that reportedly made Trump reconsider.
Trump later admitted the decision came from instinct rather than legal planning. "The bond market is very tricky, I was watching it. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy. We didn't have access to lawyers, or it was just wrote up. We wrote it up from our hearts, right? It was written from the heart, and I think it was well written too, but it was written from the heart," he told reporters.
Market Reactions
Wall Street responded with jubilation. The Dow Jones jumped over 2,500 points, posting nearly an 8% gain. The Nasdaq surged 12.2%, its best day in 24 years, while the S&P 500 climbed 6% to 5,281.44. Oil prices also rose over 4%, and the U.S. dollar strengthened.
India’s Relief
India, which has been impacted by a 26% reciprocal tariff on its exports to the U.S., is expected to benefit from the pause. The move offers breathing space for Indian markets and policymakers. MEA spokesperson Randhir Jaiswal confirmed that discussions are ongoing toward finalizing a mutually beneficial trade agreement between India and the U.S.
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