Trump Pauses New Tariffs for 90 Days, Raises China Rate to 125%

President Donald Trump announced a 90-day suspension of most newly introduced tariffs while simultaneously increasing tariffs on Chinese imports to 125%. This move, revealed on Truth Social, spurred a significant rally in U.S. stock markets, with the president describing the pause as a “strategic decision” aimed at fostering trade negotiations.

A 90-Day Pause with Exceptions

The newly announced 10% tariff rate will apply to most countries during the 90-day period, excluding China. Goods imported from China will face the elevated rate of 125%. The decision comes amidst heightened trade tensions and ongoing discussions between the U.S. and over 75 other nations regarding tariffs, trade barriers, and currency manipulation.

Treasury Secretary Scott Bessent clarified that existing tariffs on steel, aluminum, and auto imports remain unaffected. However, the new rates aim to create an opportunity for renegotiation. “This pause provides leverage and time for key trade partners to work on equitable solutions,” said Bessent.

Reasons Behind the Tariff Pause

President Trump emphasized that the decision to pause tariffs was influenced by concerns in the bond market and a need to restore confidence. “I wanted to ensure markets stabilize. The bond market was showing signs of nervousness, and now it’s looking beautiful,” he stated.

Bessent highlighted the strategic nature of the move, describing it as an opportunity to bring more countries into negotiations. “President Trump excels at creating leverage, and this pause aligns perfectly with his approach,” Bessent added.

Implications of the China Tariff Hike

While the global tariff rate is temporarily reduced to 10%, the steep increase to 125% for Chinese imports underscores the administration’s firm stance on addressing trade imbalances. “China’s actions necessitate a stronger response, and this tariff hike reflects that commitment,” explained White House press secretary Karoline Leavitt.

Trade experts have raised concerns over the potential ripple effects of these tariffs, especially on global supply chains and market stability. However, top White House advisor Peter Navarro defended the decision, calling it a “well-executed strategy” during an interview on Fox Business Channel.

The reciprocal tariffs above the baseline 10% rate took effect immediately. President Trump remains optimistic, urging investors to take advantage of the current market environment, stating, “THIS IS A GREAT TIME TO BUY!”