In a dramatic move on Wednesday, President Donald Trump unilaterally raised the U.S. tariff rate on Chinese imports to 125%, effective immediately. The decision was posted on Truth Social, where Trump stated, “I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.”
In addition to the tariff increase on China, Trump announced a 90-day pause on steep “reciprocal” tariffs on other countries. He explained that over 75 nations had reached out to the U.S. and had refrained from retaliating against the U.S. as strongly suggested by him. As a result, a substantially lower 10% reciprocal tariff would be implemented during this period.
The announcement had an immediate positive effect on the U.S. stock market, with Trump celebrating what he referred to as a “historic day” in market performance. He attributed the market surge to the news, even acknowledging what he called a “yippy” response from traders.
Earlier on the same day, China announced it would increase its tariff on U.S. goods to 84%. Meanwhile, the European Union approved a 25% tariff on a variety of U.S. goods, totaling approximately $23 billion. These moves followed the Trump administration’s decision to impose a 50% tariff on Chinese goods, alongside 34% reciprocal tariffs, pushing the overall tariff rate on Chinese goods to 104%. The escalation in trade measures between the U.S. and China has intensified, resembling a full-fledged trade war between the two largest global economies.
As for other countries, a White House official confirmed that the “reciprocal” tariffs, which had been scheduled to take effect on April 2, were temporarily paused as of 12:01 AM ET on Wednesday. However, the 10% baseline tariff, which began on April 5, remains in effect for all impacted imports.
In terms of the United States-Mexico-Canada Agreement (USMCA), goods that comply with the agreement are imported tariff-free between the three countries, while non-compliant goods are subject to a 25% tariff—except for energy and potash, which are tariffed at 10%.
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