US PRESIDENT Donald Trump has abruptly backed down on his tariffs on most nations for 90 days but raised his tax rate on Chinese imports to 125%.
The US Treasury Secretary Scott Bessent told reporters that Trump was pausing his so-called “reciprocal” tariffs on most of the country’s biggest trading partners, but maintaining his 10% tariff on nearly all global imports.
Trump said on social media that import tariffs on goods from China would surge to 125% “effective immediately”.
Amid a global market meltdown, the move was seemingly an attempt to narrow what had been an unprecedented trade war between the US and most of the world to one between the US and China.
Global markets surged following the development, but the precise details of Trump’s plans to ease tariffs on non-China trade partners are not immediately clear.
Bessent said more than 75 countries have called the US to discuss terms, and Washington is ready to negotiate in "good faith", adding the 90-day pause gives time for just that.
The US Treasury Secretary said that the markets “didn’t understand” Trump’s tariff strategy.
He told reporters at the White House: “The market didn’t understand, those were maximum levels. The countries can think about those levels as they come to us to bring down their tariffs, their non-trade barriers.”
He said Trump “created maximum negotiating leverage for himself” and the Chinese have “shown themselves to the world as the bad actors”.
Following the announcement, Keir Starmer has warned that striking an economic deal with the US or securing lowered American tariff rates for the UK will not be “enough” for Britain.
The Prime Minister conceded he was unsure whether the 10% import tax imposed by Donald Trump on British goods would be in place indefinitely and said the Government must “step up” to adapt to a rapidly changing world.
The US President made the shock announcement on his Truth Social platform where he said: "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 U.S.A., and other Countries, is no longer sustainable or acceptable."
The United States sent a record 199 billion dollars in exports to China last year, while China exported 463 billion dollars in goods and services to the United States, third behind Mexico and Canada, according to the US Commerce Department.
China was the top source of US imports as recently as 2022 but it has lost ground to America’s neighbours amid heightened tensions with the United States.
Earlier on Wednesday, China boosted taxes on US imports to 84% and vowed to “fight to the end”.
Beijing also imposed restrictions on doing business with nearly a dozen US companies and said it was launching a new challenge to the American tariffs at the World Trade Organisation.
