Trump Raises Tariffs on China to 125%, Pauses Measures for Other Nations

President Donald Trump announced a dramatic escalation in the trade war with China on Wednesday, raising U.S. tariffs on Chinese imports to an unprecedented 125%.

Simultaneously, he instituted a 90-day pause on reciprocal tariffs for countries that have refrained from retaliating against the United States, signaling a mixed approach to global trade tensions.

The tariff increase against China, effective immediately, follows weeks of tit-for-tat measures between the two economic giants. Trump's announcement, made via Truth Social, emphasized his administration's intent to penalize China while offering temporary relief to other nations.

"More than 75 countries have chosen not to retaliate against the United States," Trump stated, adding that these nations would benefit from a reduced reciprocal tariff rate of 10% during the pause period.

The move sent shockwaves through financial markets. While U.S. stocks initially rallied on news of the tariff pause for non-retaliating nations, uncertainty surrounding China's response and broader trade implications tempered gains.

Asian markets were hit hard; Japan's Nikkei index fell 4%, and South Korea's Kospi entered bear market territory, reflecting global apprehension over prolonged economic disruption.

China swiftly retaliated by raising its own tariffs on U.S. goods to 84%, further entrenching the trade war. The European Union also imposed a 25% tariff on $23 billion worth of American goods, signaling widening global resistance to Trump's aggressive trade policies.

Analysts warn that escalating tariffs could push both the U.S. and global economies toward recession, with rising costs for businesses and consumers expected to dampen spending and hiring.

Commerce Secretary Howard Lutnick framed the developments as evidence of international support for Trump's approach, tweeting that "the world is ready to work with President Trump to fix global trade."

However, critics argue that the administration's strategy lacks clarity. Foreign governments reportedly remain uncertain about Trump's ultimate objectives, with many awaiting responses to requests for negotiations.

Despite mounting pressure from Wall Street and within his own party, Trump has remained defiant. He claimed that countries like Japan and South Korea are eager to negotiate, though talks with China appear stalled amid deepening tensions.

Meanwhile, individual investors have flooded financial advisers with concerns about their portfolios as market volatility continues to rise.