90-day tariff pause announced as stock markets rally; China now faces 125% duty amid escalating trade tensions
In a major shift, former President Donald Trump announced a 90-day pause on recently imposed higher tariffs for dozens of U.S. trade partners. At the same time, he sharply increased tariffs on Chinese imports to 125%, signaling a tougher stance against Beijing.
The announcement came just hours after reciprocal tariffs on 56 countries and the European Union took effect, rattling markets and sparking fears of a global economic slowdown. Facing mounting pressure from business leaders and investors, Trump moved to ease tensions—at least temporarily—with America’s broader trade allies.
“I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump said in a social media post.
Key Details of the Tariff Pause
The temporary relief will not eliminate tariffs entirely. Nations included in the pause will still face a 10% baseline tariff, down from the more aggressive rates introduced over the weekend. The administration has yet to publish a full list of countries affected by the pause, but Trump noted that over 75 nations had contacted his team to discuss trade terms. He emphasized that none had retaliated following the initial hike.
This move appears to be a calculated effort to cool rising tensions while encouraging negotiations. Treasury Secretary Scott Bessent framed the pause as a strategic advantage, saying Trump had created “maximum negotiating leverage” as talks with countries like Vietnam, Japan, India, and South Korea are expected to begin soon.
China Tariffs Escalate
While the U.S. shows flexibility with many nations, it is doubling down on its approach to China. Trump accused Beijing of failing to respect global trade markets and refusing to engage in meaningful negotiations.
In response, Trump increased the tariff on Chinese imports from 104% to 125%. China had earlier retaliated with an 84% tariff on U.S. goods, further straining relations between the world’s two largest economies.
“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 posted online.
Market Reactions
Financial markets responded swiftly to the announcement. The Dow Jones Industrial Average surged by more than 5%, while the Nasdaq jumped over 7%. The S&P 500 Index also climbed, rising around 1% by the end of the day.
Investors welcomed the pause, interpreting it as a sign that further escalation with U.S. allies may be avoided. However, the increased tariffs on China suggest the trade conflict with Beijing remains far from resolved.
Global Trade Outlook
The 90-day window provides an opportunity for international negotiation, but uncertainty lingers. Many U.S. allies had expressed concerns about being caught in the middle of Trump’s broader trade strategy. The paused tariffs give them breathing room to engage diplomatically without immediate economic repercussions.
Still, trade experts note that frequent shifts in U.S. policy may affect long-term business confidence. The back-and-forth over tariffs raises questions about stability in international trade relations.
While the administration’s goal appears to be securing better terms for American industries, the tactics continue to divide opinion across political and economic circles.
Looking Ahead
The coming weeks will be crucial for determining how negotiations unfold. With the U.S. offering tariff relief to dozens of partners while isolating China economically, the strategy walks a fine line between diplomatic outreach and economic confrontation.
For now, markets are reacting positively, but global businesses will be watching closely to see if the 90-day pause results in sustainable agreements—or if new tariffs will return once the window closes.
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