The trade war is heating up.
On Wednesday, President Donald Trump announced a temporary reduction of tariff rates to 10% on imports from most U.S. trade partners for a period of 90 days. This move is intended to facilitate ongoing trade negotiations with these countries. The announcement came shortly after the United States implemented stricter “reciprocal tariffs” on goods from nearly 90 nations.
In a separate social media post, Trump revealed that the tariffs on imports from China would be increased to 125%, effective immediately, citing a lack of respect China has shown for global markets. This decision followed China’s earlier announcement that it would raise its tariffs on U.S. imports to 84%. Trump also noted that more than 75 countries had reached out to U.S. officials seeking to negotiate after the new tariffs were revealed last week.
Following the president’s announcement, stock markets surged, with the S&P 500 index jumping 7%, reversing a four-day streak of losses. When asked about the rationale behind his decision, Trump explained to reporters that he felt people had been overreacting and becoming unnecessarily fearful.
Treasury Secretary Scott Bessett defended Trump’s actions, stating that the president had always planned to pause the tariffs. This followed a previous announcement from Trump on April 2 that a baseline tariff rate of 10% would apply to imports from over 180 countries, with additional reciprocal tariffs ranging from 11% to 50% applied to imports from 90 specific countries.
The announcement sparked criticism from Senate Minority Leader Chuck Schumer, who argued that Trump was backing down due to pressure from Democrats and the public. Schumer described the situation as “government by chaos,” highlighting the constant changes and lack of clarity in the administration’s approach to global trade.
Commerce Secretary Howard Lutnick praised Trump’s efforts, stating that the world was ready to work with the president to address global trade issues, while also criticizing China’s stance.
