US President Donald Trump on Wednesday announced he is ordering a 90-day pause on so-called reciprocal tariffs on all countries except China.
The announcement comes after business executives warned of a potential recession caused by the Trump administration's policies, and some of the top US trading partners retaliated by imposing import taxes.
"I have authorised a 90-day pause, and a substantially lowered reciprocal tariff during this period, of 10 per cent, also effective immediately," Mr Trump wrote on social media.
Treasury Secretary Scott Bessent clarified that Mr Trump is maintaining the 10 per cent tariff on nearly all global imports.
“The market didn’t understand, those were maximum levels. The countries can think about those levels as they come to us to bring down their tariffs, their non-trade barriers,” Mr Bessent told reporters at the White House.
The 10 per cent tariff was the baseline rate for most nations that went into effect on Saturday. It is significantly lower than the 20 per cent tariff that Mr Trump had set for goods from the EU, 24 per cent on imports from Japan and 25 per cent on products from South Korea. But the 10 per cent represents an increase in the tariffs previously charged by the US government.
Markets began to rally on Wednesday afternoon following the announcement, as investors' fears about the spillover effects of a wider trade war were temporarily relieved. It comes after the biggest two-day wipeout in the history of US stocks last week, with a combined $6.6 trillion in value erased on Thursday and Friday.
The President said he is raising the tariffs charged to China to 125 per cent in an apparent attempt to reduce what had been an unprecedented trade war between the US and most of the world to one between Washington and Beijing.
"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 per cent, effective immediately," he said.
Mr Trump had previously issued a 104 per cent levy on Chinese goods, with China responding with its own 84 per cent levy.
The details of Mr Trump's plans to ease tariffs on non-China trading partners have yet to be established.
The President said at an event later on Wednesday: "I did a 90-day pause for the people that didn't retaliate because they told them if you retaliate, we're going to double it, and that's what I did with China, because they did retaliate, so we'll see how it all works out. I think it's going to work out amazing."
White House press secretary Karoline Leavitt said the walk-back was part of a larger negotiating strategy.
“President Trump created maximum negotiating leverage for himself,” she said, adding that the news media "clearly failed to see what President Trump is doing here".
"You tried to say that the rest of the world would be moved closer to China, when in fact, we’ve seen the opposite effect. The entire world is calling the United States of America, not China, because they need our markets.”
