Trump announces 90-day pause on tariffs for most countries, but raises them to 125% for China – business live
Trump announces 90-day pause on tariffs except for China
Donald Trump has announced a 90-day pause on tariffs effective immediately.
The US president, in a post on his Truth Social platform, wrote:
I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
Trump also said he would be raising tariffs on China to 125%, also effective immediately, citing the “lack of respect that China has shown to the world’s markets”.
Key events
The World Trade Organization chief said Wednesday the US-China tariff war could reduce trade in goods between the two economic giants by 80 percent, pulling down the rest of the world economy.
Okonjo-Iweala said that the US-China tariff war could reduce trade in goods between the two countries by 80%.
Okonjo-Iweala’s comments come after Trump’s comments raised tariffs on China to 125% on Wednesday.
“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 percent,” Okonjo-Iweala said in a statement.
Okonjo-Iweala added that the tariff war could “severely damage the global economic outlook.”
Okonjo-Iweala warned that the world economy risked breaking into two blocs, one centred around the United States and the other China.
“Of particular concern is the potential fragmentation of global trade along geopolitical lines. A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven percent,” she said.
She urged all WTO members “to address this challenge through cooperation and dialogue.”
Scott Bessent: latest tariff changes were in Trump’s ‘strategy all along’
Addressing reporters at the White House on Wednesday, treasury secretary Scott Bessent said the latest changes in Donald Trump’s tariffs policy was Trump’s “strategy all along.”
“This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded. They have shown themselves to the world to be the bad actors, and we are willing to cooperate with our allies and with our trading partners who did not retaliate. It wasn’t a hard message, don’t retaliate, things will turn out well.”
Speaking on Fox Business on Wednesday, Peter Navarro, a key Trump ally and and White House trade advisor, said:
“This is one of the greatest days in American economic history… I think we’re going to call it the art of the reciprocal trade deal… All the nervous nellies who tried to undermine us consistently underestimate the power of the president.”
He added that the US will negotiate with countries “who have come to us” over the next 90 days.
The White House has confirmed Donald Trump’s statement announcing a 125% tariff on China and a 90-day pause and lowered 10% tariff for other countries, effective immediately.
The White House’s press secretary, Karoline Leavitt, said Trump had raised tariffs against China because “when you punch at the United States of America, President Trump is going to punch back harder”.
She also said the US will continue with tailor-made negotiations and that tariff level will be brought down to a universal 10% during negotiations.
US to keep 10% baseline tariffs on most countries including Mexico and Canada, says treasury secretary
The US treasury secretary, Scott Bessent, has been speaking to reporters outside the White House after Donald Trump announced he authorised a 90-day pause on tariffs on most countries and a China tariff raise to 125%.
Bessent said countries who did not retaliate against the US tariff announcement last week will be “rewarded”.
“Do not retaliate, and you will be rewarded,” he said. He noted that the tariff rate on Chinese goods has been raised “due to their insistence on escalation”.
Mexico and Canada are included in the 10% baseline tariffs, he said.
Stocks surge after Trump’s tariff pause announcement
Global markets surged after Donald Trump announced a 90-day pause on tariffs except for China.
The S&P 500 is surging 5.6%, while the Nasdaq has jumped over 8%.
Trump’s Truth Social statement suggests he has backed down on tariffs on most countries for 90 days, applying instead a 10% tariff.
He also announced he has raised his tax rate on Chinese imports to 125%.
It is unclear whether any other nations besides China will face tariffs above the 10%.
Trump announces he is raising tariffs for China to 125%
Here’s the full statement by Donald Trump on his Truth Social platform, in which he has announced a 90-day pause on tariffs except for China:
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. 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.
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.
Thank you for your attention to this matter!
Trump announces 90-day pause on tariffs except for China
Donald Trump has announced a 90-day pause on tariffs effective immediately.
The US president, in a post on his Truth Social platform, wrote:
I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
Trump also said he would be raising tariffs on China to 125%, also effective immediately, citing the “lack of respect that China has shown to the world’s markets”.
Summary of the day so far
The US stock market has edged higher, led by gains in technology shares, while other markets worldwide swung sharply as Donald Trump’s trade war continues to escalate.
Large technology stocks led the gains, with Apple rising 3.3% and Nvidia up 2%. The tech sector was up 1.5%. However at noon ET, the Dow Jones industrial average fell 161.21 points, or 0.43%, to 37,484.38, the S&P 500 lost 13.71 points, or 0.28%, to 4,969.06 and the Nasdaq Composite gained 58.83 points, or 0.39%, to 15,327.41.
Here’s a recap of the latest developments:
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China announced new tariffs of 84% on imports of all US goods, up from the 34% previously announced, hours after US tariffs on Chinese products went up to a staggering 104%. China’s retaliation sent stock markets falling further with major indices down in the UK, Germany, France and Spain.
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The EU announced 25% tariffs on a range of US imports in a first round of countermeasures. The 27-member bloc has agreed to impose retaliatory tariffs on €21bn (£18bn) of US goods, targeting farm produce and products from Republican states. All member states voted for the retaliation, with the exception of Hungary.
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US markets recovered later on Wednesday after the US Treasury secretary, Scott Bessent, indicated that America was open to trade agreements with allies and a subsequent group deal with China. In his first comments since China’s 84% tariff announcement, Trump urged Americans to “be cool”. The US president bragged about countries “kissing my ass” to negotiate tariffs during Tuesday night dinner.
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The CEO of JP Morgan Chase warned that a US recession seems increasingly likely as Donald Trump’s tariffs rattle financial markets. A 2,000-point drop in the Dow “feeds on itself,” leading people to feel the pinch in their 401(k)s and pensions, prompting them to cut back, Jamie Dimon said.
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The Bank of England warned that Trump’s sweeping tariffs have put global growth at risk, heaping pressure on government finances and increasing the likelihood of “severe shocks” to the financial system.
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Oil prices slid to a multiyear low, dipping below the $60 per barrel mark for the first time since February 2021. The oil price slump means the Kremlin can effectively shrug off the G7’s $60 cap price cap on Russian oil exports.
British 30-year government bond yields surged to their highest since May 1998 on Wednesday, after another sharp rise in US Treasury yields driven by president Donald Trump hitting China with 104% tariffs.
The 30-year British gilt yield peaked at 5.649% at 12.22pm GMT, up more than 30 basis points on the day, before easing back to show a rise of about 18 bps at 5.53% at 3pm GMT, Reuters reported.
The rise was roughly on par with Monday’s increase, which was the biggest one-day move since shortly after former prime minister Liz Truss’ failed “mini-budget” in October 2022. Long-dated bond yields have rocketed across major economies, led by US Treasury yields. Japanese yields hit a 21-year high.
But Wednesday’s increase in British 30-year gilt yields was sharper than a 10 bps rise in equivalent US Treasuries, reminding some analysts of Britain’s fiscal vulnerabilities.
“The problem now for the UK bond market is one of liquidity and positioning,” said Kathleen Brooks, research director at brokers XTB.
On Wednesday the Bank of England, in a quarterly update on financial risks, noted that hedge funds had 61 billion pounds ($78bn) of net gilt repo borrowing last month, up from 4 billion pounds at the start of 2024.
“Use of leverage, if not properly managed, could amplify shocks and cause a jump to illiquidity,” the BoE said.
Larry Elliott
Donald Trump’s decision to impose a 104% tariff on Chinese imports into the US has spooked the financial markets. The response is entirely rational.
Over the past few decades, phoney trade wars have been commonplace. Rival nations have squared off against each other, indulged in a bit of sabre-rattling, but eventually agreed on a deal. Headlines that screamed “trade war looms” were quickly replaced by those that read “trade war averted”.
This time it’s different. The battle between the US and China prompted by Trump’s tariffs is no pretend trade war. It is the real deal – and it will have real consequences. Tariffs operate as a tax, adding to the costs of doing business and raising prices for consumers. Growth will slow and inflation rates will rise. The global economy was already growing only slowly. As things stand, it is now heading for recession.
Trump seems prepared for this, making it clear that he is ready for some short-term pain for what he thinks will be long-term gains: a revitalised US industrial base and higher exports. This also represents a shift in approach. In the past, US policymakers have tended to take fright at big falls on Wall Street and have eased policy to limit the damage.
Not this time, it appears. Or at least not yet. Trump promised to impose swingeing tariffs when he was running for president last year, but the expectation was that this was just campaign rhetoric. Instead, he has delivered on his pledges – and then some.
Jennifer Rankin
The EU has agreed to impose retaliatory tariffs on €21bn (£18bn) of US goods, targeting farm produce and products from Republican states, in Europe’s first act of retaliation against Donald Trump’s tariffs.
The EU plans to introduce 25% tariffs on scores of goods from almonds to yachts, with the first duties being collected from 15 April, while the bulk apply from 15 May and the remainder from 1 December.
In a statement confirming the favourable vote by EU member states, the European Commission said: “The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy.”
It added: “These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome.”
All member states voted for the retaliation, with the exception of Hungary, whose prime minister, Viktor Orbán, is one of Trump’s strongest supporters. “Such measures would cause further damage to [the] European economy and citizens by raising prices. The only way forward is negotiations, not retaliation,” Hungary’s foreign minister, Péter Szijjártó, wrote on social media.
The EU decision came after China announced it was hitting all US goods with 84% tariffs from Thursday, up from the 34% previously announced.
JP Morgan Chase CEO Jamie Dimon warned on Wednesday that a US recession seems increasingly likely as president Donald Trump’s tariffs rattle financial markets.
Stocks and bonds plummeted in morning trading, with stock futures dropping and bond yields rising as concerns over economic stability continue to grow. Dimon, speaking on Fox Business, said a 2,000-point drop in the Dow “feeds on itself,” leading people to feel the pinch in their 401(k)s and pensions, prompting them to cut back.
“I think probably [a recession is] s a likely outcome, because markets, I mean, when you see a 2000-point decline [in the Dow Jones industrial average], it sort of feeds on itself, doesn’t it,” Dimon said on Fox Business’ “Mornings With Maria” show. “It makes you feel like you’re losing money in your 401(k), you’re losing money in your pension. You’ve got to cut back.”
With the trade war showing no signs of easing, recession fears are mounting on Wall Street as the uncertainty deepens.
Fiona Harvey
Plans for a levy on the carbon produced by ships are being opposed by the US government, on the apparent basis they would “impose substantial economic burdens” and “drive inflation”.
There will be fierce debate in London this week on the future of global shipping over the proposals to charge up to $150 (£117) a tonne for the greenhouse gas emissions from ships. Those in support say the measure will be crucial to generating billions of dollars of climate finance a year to help poor countries cope with the impact of the climate crisis.
But now the US appears to have joined China, Brazil, Saudi Arabia and at least a dozen other states in opposing the levy at the International Maritime Organization negotiations. A leaked document seen by the Guardian, which has not yet been verified by the US government, purports to threaten countries with “reciprocal measures” if they agree to any levy.
The document appears to have been sent to governments at the talks to urge them to “reconsider any support for the GHG [greenhouse gas] emissions measures under consideration”.
However, sources suggest the US is still present and taking part in the talks, which are scheduled to carry on until late afternoon on Friday.
Donald Trump bragged about countries “kissing my ass” to negotiate tariffs during a dinner for Republicans on Tuesday.
The US president said:
We’re going to do much better than that this time, because this time I’m doing what I want to do with respect to the tariffs.
He added that Congress should not get involved in the negotiations because “they don’t negotiate like I negotiate”.
Oil price slump means Russian price cap is ‘meaningless’
Jillian Ambrose
The Kremlin can effectively shrug off the G7’s price cap on Russian oil exports after the global benchmark price slumped below $60 a barrel.
The $60 cap on Russian oil exports was put in place in late 2022 – when oil traded at well over $100 a barrel – to limit the oil revenues that Moscow could put towards its war efforts in Ukraine without inflating oil market prices further by banning their exports altogether.
It effectively barred all G7 and EU nations from purchasing Russian barrels above $60 – or providing shipping, insurance, brokering, trade finance, and other support services for any deals done above the cap.
Russia was able to bypass the cap through a series of loopholes including the use of a shadow fleet of aging oil tankers to carry cargoes at the usual market rates. Experts believe it may still have cost the Kremlin around €34bn in export revenues in its first year, or roughly two months worth of earnings.
But the aggressive sell-off in the oil market over the past week over fears of a global economic recession has meant the cap is “currently meaningless”.
Clayton Seigle, a senior fellow the Center for Strategic and International Studies (CSIS) in Washington DC, told the Guardian that the G7 could now considering “tightening the screws” on the Kremlin by lowering the cap.
I personally would be in favour of lowering the cap even further. There might be a willingness within the G7 to do this to punish Moscow, especially because there are no real fears about leaving the market under-supplied.
But it’s a political decision.
The UK government was approached for comment.
While share prices on Wall Street appear to be taking a breather after four days of selling, investors are clearly asking themselves if it is worth owning US assets at all.
George Saravelos, head of foreign exchange research at Deutsche Bank, wrote in a note to clients today that he feared that disorderly markets could eventually force the Federal Reserve to step in.
He wrote:
We are witnessing a simultaneous collapse in the price of all US assets including equities, the dollar versus alternative reserve FX and the bond market. We are entering uncharted territory in the global financial system.
Saravelos argued that Trump’s hopes of reducing bilateral trade deficits are “functionally equivalent to lowering demand for US assets as well”.
He also noted that the next stage of escalation with China will be key. There could be serious problems if the US tries to use its financial power against China. Saravelos wrote:
With a 100%+ tariff on China, there is little room now left for an escalation on the trade front. The next phase risks being an outright financial war involving Chinese ownership of US assets, both on the official and private sector front. It is important to note there can be no winner to such a war: it will damage both the owner (China) and the producer (US) of those assets. The loser will be the global economy.
The Federal Reserve could cushion some of the blow, he argued, but in the end only one thing can properly stabilise markets: “a reversal in the policies of the Trump administration itself”.
Donald Trump is clearly watching the stock market closely this morning in the US.
On Truth Social, the platform he owns, he wrote:
BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!
And that was followed by:
THIS IS A GREAT TIME TO BUY!!! DJT
It appears that some investors agree, as the selling pressure has eased on stock indices. The FTSE 100 is now down 2.1% – still a fairly painful move over a single day, but less remarkable.
Oil prices have recovered somewhat, with Brent crude futures back above $60 per barrel.
In the space of a few minutes the US markets have turned around: the S&P 500 is now up by 0.4%.
The Dow Jones industrial average – a less useful gauge – is still down by 0.3%. And to round off the mixed bag, the Nasdaq is up by 1%.
