Trump bows to market pressure and approves a 90-day pause in trade war

U.S. President Donald Trump posted on Wednesday a message on his social media platform, Truth, announcing an immediate increase in tariffs on China to 125%. However, it’s not clear whether this includes the previously proposed 20% tariff on fentanyl or refers solely to reciprocal tariffs. At the same time, he has granted a 90-day pause on tariffs on other countries.

A universal 10% tariff on all nations remains in effect, along with existing duties on automobiles, steel, and aluminum — measures that together already represent the most significant protectionist barrier in a century. Markets surged following the announcement, with Wall Street posting gains of 6% to 8%. Earlier Wednesday morning, Trump posted: “This is a great time to buy.”

Trump’s move creates a dilemma for his trade partners, including the European Union, which now faces a 10% tariff, with the prospect of an increase if there is any retaliation. For the time being, Trump is using China as an example.

“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 announced on Truth Social. “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.”

“Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!” The details of his decision are unclear.

The so-called reciprocal tariffs went into effect at midnight Tuesday into Wednesday on the U.S. East Coast. Some U.S. television networks even displayed countdowns on their broadcasts as the implementation drew near. The new measures include a 104% tariff on imports from China, 20% on goods from the European Union, and between 20% and 50% for dozens of other countries, including Japan, South Korea, and Switzerland.

U.S. Treasury Secretary Scott Bessent said that the entire strategy is Trump’s doing, which could be seen as both praise and as a disclaimer.

There was no expectation of a last-minute reversal — something the president has done in the past in his often erratic and unpredictable trade policy. This time, the countdown proved inevitable. The president signed a final executive order approving a 50% surcharge specifically on Chinese imports.

In two separate speeches, Trump sent mixed messages: on one hand, suggesting room for negotiation, while on the other, making it clear that he seeks to approach any talks from a position of dominance.

“These are tailored, highly tailored deals,” Trump said at the White House, surrounded by miners—one of the industries Trump envisions for the future of the United States. “Right now, Japan is flying here to make a deal, South Korea is flying here to make a deal, and others are flying here.”

“We’ve had talks with many, many countries, over 70, they all want to come in. Our problem is, can’t see that many that fast,” he added.

However, just hours later, at an event with Republican congressmen, dressed in a tuxedo and bow tie, he descended into vulgarity. “I’m telling you, these countries are calling us up, kissing my ass,” he said. Mocking the pleas of foreign leaders, he parodied: “Please, please, sir, make a deal. I’ll do anything. I’ll do anything, sir!”

“We don’t necessarily want to make a deal with them,” added the president, who, despite the contradictions and the disastrous effects his measures have had on the markets and the economy, insisted that he knows exactly what he’s doing.

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