President Donald Trump has escalated tensions with China in an intensifying trade conflict, even as he announced a 90-day pause on higher tariffs for other nations affected by recent U.S. trade measures.
In a sharp reversal just hours after sweeping tariffs took effect on approximately 60 U.S. trading partners, Trump revealed a new policy: a universal “lowered reciprocal tariff” of 10%, signaling ongoing trade talks. However, he simultaneously raised duties on Chinese goods to a staggering 125%, accusing Beijing of retaliating and showing a “lack of respect” by threatening 84% tariffs on U.S. imports.
The shift follows Trump’s major announcement just one week earlier to apply import tariffs on all foreign goods entering the U.S.—a move considered one of the most significant overhauls of global trade policy in decades.
Under the administration’s plan, all imports were subject to a baseline 10% tariff, with higher penalties applied to what the White House labeled as the “worst offenders” in trade practices. This list included the European Union, Vietnam, South Africa, and numerous others, which faced potential tariffs ranging from 11% to over 100%.
The initial news of the tariffs sent global markets reeling, triggering widespread sell-offs that wiped out trillions in market value, sparking fears of consumer price hikes, and raising concerns among economists about an increased risk of recession.
Before Trump announced a suspension of the higher tariffs for countries other than China, U.S. government debt yields spiked, with interest rates climbing to 4.5%—the highest since February—reflecting investor anxiety.
When news broke of the temporary reprieve, financial markets reacted with optimism. The S&P 500 jumped 7% during afternoon trading and closed up 9.5%, while the Dow Jones rose 7.8%.
In a post on Truth Social, Trump confirmed the 90-day halt on tariffs for countries that hadn’t retaliated against U.S. trade measures. He made clear that the elevated tariffs on China would take effect immediately, reiterating that the U.S. would no longer tolerate what he described as unfair trade practices.
“Eventually, China will understand that taking advantage of the U.S. and other nations is neither sustainable nor acceptable,” Trump wrote.
A Shifting Stance Sparks Political Debate
Despite the market rebound, critics saw Trump’s maneuvering as politically driven. While Treasury Secretary Scott Bessent denied the shift was influenced by market turmoil, Senate Democrat Chuck Schumer said the president appeared to be “retreating under pressure.”
Speaking from the White House, Trump insisted the adjustments were necessary. “I had to do it,” he said. “People were getting yippy.”
He added, “The countries that didn’t retaliate got a 90-day break. China did, and I doubled their rate—simple as that. But I still think we’ll reach an amazing outcome.”
Trump also expressed optimism about resolving tensions with Chinese President Xi Jinping, saying, “I think he’s going to want a deal.”
In the UK—already subject to the 10% baseline tariff—Downing Street urged de-escalation, with a spokesperson stating that “a trade war benefits no one.” A British government source remarked that the U.S. decision demonstrated the value of “staying calm and collected.”
The U.S.-China Trade Rift Deepens
The renewed standoff between the world’s two largest economies began with Trump’s initial decision last week to implement new tariffs on Chinese goods. An additional 34% tariff was added to a pre-existing 20% levy, prompting China to hit back with equal 34% duties on U.S. imports.
Unmoved, Trump upped the ante, threatening an additional 50% tariff, pushing the total to 104% unless Beijing backed down. But China stood firm, warning it would “fight to the end” if provoked into a trade war.
Shortly after the 104% tariffs were implemented by the U.S., China responded by announcing that starting Thursday, it would increase tariffs on American products to 84%.
China’s Foreign Ministry spokesperson, Lin Jian, accused the U.S. of “abusing tariffs” and labeled its actions as “bullying,” adding that fair negotiations would only happen if the U.S. showed mutual respect and a spirit of equality.
According to projections from the World Trade Organization, the escalating conflict could shrink U.S.-China trade by up to 80%, representing a potential $466 billion drop.
WTO Director-General Dr. Ngozi Okonjo-Iweala warned that “continued escalation presents substantial risks to the global economy,” citing recent developments as grounds for serious concern.
Broader Tariffs Remain in Force
Outside of China, other tariff policies announced in recent weeks remain in place. These include a 25% tax on imported vehicles and parts that took effect on April 2, as well as a 25% duty on steel and aluminum.
Earlier Wednesday, the European Union approved an initial set of retaliatory tariffs against the U.S., set to begin on April 15. The EU—previously listed among the worst trading offenders—was slated for a 20% tariff. However, since its retaliatory measures had not yet been enacted, the White House included the EU in the 90-day pause, capping its rate at 10%.
Meanwhile, Canada and Mexico—longtime U.S. trade partners—were never subjected to the 10% baseline tariff. According to a White House official, they will continue to be exempt under the current framework.
