President Donald Trump announced a complete three-month pause on all the “reciprocal” tariffs that went into effect at midnight, with the exception of China, a stunning reversal from a president who had insisted historically high tariffs were here to stay.
But enormous tariffs will remain on China, the world’s second-largest economy. In fact, Trump said they will be increased to 125% from 104% after China announced additional retaliatory tariffs against the United States earlier Wednesday. All other countries that were subjected to reciprocal tariff rates Wednesday will see rates go back down to the universal 10% rate, 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,” Trump said in his social media post. “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,” he wrote.
Speaking to reporters after the announcement, Trump said, “Nothing’s over yet, but we have a tremendous amount of spirit from other countries, including China. China wants to make a deal, they just don’t know how quite to go about it.”
Mexico and Canada won’t face the 10% tariffs, a White House official told CNN. Almost every good coming from the two nations will continue to be tariffed at 25%, unless they are compliant with the US-Mexico-Canada Agreement, in which case they won’t face tariffs. However, that does not apply to sector-specific tariffs Trump has imposed.
Wall Street breathed a sigh of relief, however, that Trump was backing down on other extreme trade measures. Stocks rallied sharply on the news – even though the 10% universal tariff on all imports coming into the United States remained in effect.
