Markets reacted favorably on Wednesday after President Trump announced that he would institute a 90-day pause on reciprocal tariffs for most countries while increasing the tariffs levied against China.
In a Truth Social post, Trump explained the updated approach to tariffs, specifically singling out China for its insistence on maintaining an imbalanced trade policy with the U.S.
“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. “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.”
Trump continued by pointing out that many countries had attempted to open lines of communication and negotiate trade deals rather than retaliate against the U.S. In response to the show of good faith from such countries, a 90-day pause on reciprocal tariffs will be enacted.
“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,” Trump said.
White House Press Secretary Karoline Leavitt said the 75 countries that have contacted President Trump and his administration have been willing to “negotiate better trade deals for the American worker.”
“We have been overwhelmed with the amount of requests from countries around the world,” Leavitt said. “We will continue with the tailor made negotiations…in the meantime there will be a 90-day pause on the reciprocal tariffs as these negotiations are ongoing, and the tariff level will be brought down to a universal ten percent tariff.”
In response to the update on trade policy, U.S. stocks climbed and were on track for their best day in over five years. The S&P 500 grew by 9 percent as the closing bell approached, marking its best day since March of 2020.