President Trump launches sweeping shift in tariff strategy, aiming to calm markets and pursue country-specific trade deals.
In a dramatic reversal of policy, President Donald Trump announced a 90-day pause on most reciprocal tariffs on Wednesday.
He stated that the decision was driven by growing interest in bilateral trade talks and the need to maintain market stability.
This move is expected to ease pressure on most of America’s trade partners.
However, at the same time, Trump escalated his tariff stance on Chinese imports. He raised the rate to a staggering 125%, citing continued economic aggression and a “lack of respect” from Beijing.
Why the sudden 90-day Tariff pause was announced
Trump’s announcement came during a press briefing at the White House.
He justified the 90-day delay as a strategic move. It is meant to give space for negotiations with more than 75 countries that have reached out to his administration seeking one-on-one trade agreements.
“I thought people were jumping a little bit out of line,”
Trump told reporters, referencing what he called “yippy” critics and volatility in the bond market. “They were getting a little bit afraid — unlike these champions,” he said, flanked by NASCAR Cup Series winners Joey Logano and Ryan Blaney.
The move maintains a 10% tariff on most imported goods. However, vehicles will now face a 25% tariff, and trade under the USMCA (with Canada and Mexico) remains unaffected.
This freeze will remain in place until July 8, allowing the administration time to negotiate “tailor-made” trade deals.
Chinese imports targeted with aggressive 125% tariff hike
While most nations received a reprieve, China did not. In a stark escalation, Trump raised tariffs on Chinese imports from an already-increased 84% to 125%, citing Beijing’s retaliatory measures and refusal to cooperate.
“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 wrote in a Truth Social post.
Trump argued that China’s trade practices had long undermined U.S. economic interests.
“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 said.
Stock surge and bond market watch
Trump’s announcement appeared to catch markets off guard — but in a positive way.
The Dow Jones Industrial Average surged more than 2,500 points, closing up 7.8%, which Trump enthusiastically described as “gotta be a record.”
“It’s up almost 7 percentage points… nobody has ever heard of it,” he told Sen. John Barrasso (R-Wyo.) on the White House lawn.
When asked if he was responding to recent turbulence in the bond market — partially triggered by China’s selloff — Trump gave a response. He acknowledged that he was monitoring the situation.
However, he claimed that the bond market was now “beautiful.”
Trade negotiations to begin on a country-by-country basis
Treasury Secretary Scott Bessent projected that the administration could start finalizing one-for-one trade agreements by June.
Paving the way for what Trump called “something nobody would have dreamt possible.”
The administration is seeking reciprocal trade deals that match tariffs and duties equally between the U.S. and partner countries.
“A deal is going to be made with China. A deal is going to be made with every one of them,” Trump declared confidently, insisting that even the Chinese government is “in the process of figuring it out.”
Despite previous hardline statements, Trump said the pause was a strategic tool. He also admitted that “a lot of times it’s not a negotiation until it is.”
Behind the scenes, Trump’s abrupt policy pivot reportedly came as a surprise to many within his own administration.
Another insider noted that the shift “caught major players off guard.”
Regardless of the internal confusion, Trump remains bullish on the success of his renegotiation strategy. “It even takes guts for our country to go through it,” he said. “That’s why I said, ‘be cool.’”