Tariff freeze shocks markets, but Chinese goods hit with 125% rate
President Donald Trump has announced a sweeping 90-day pause on the introduction of new tariffs for most U.S. trading partners, a move aimed at diffusing global tensions—except with China, where tariff rates are being sharply escalated to 125%.
The announcement, made via Truth Social on Wednesday afternoon, reflects a dual-track strategy by the Trump administration to ease pressure on some allies while intensifying its long-standing economic confrontation with Beijing.
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump wrote.
Canadian exporters escape Trump tariff hikes — for now
Although the list of exempt countries has not been confirmed, early indications suggest Canada will not be subject to new tariffs during the 90-day pause. Trump has previously stated that the 10% universal tariff would not apply to Canada and Mexico. As such, Canadian exporters may avoid immediate escalation, but the economic environment remains precarious.
“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 posted.
He added, “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.”
The pause, according to Trump, was driven by negotiations involving over 75 countries.
“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,” Trump wrote, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%.”
Markets soar on Trump tariff pause — but China tensions linger
The financial markets reacted swiftly to the announcement, CNN reported.
The Dow Jones Industrial Average surged 2,200 points, a 5.9% gain. The S&P 500 rose by 6.5%, and the Nasdaq saw gains exceeding 8%, reflecting investor optimism that a trade truce—however temporary—could stabilize the global economy.
Yet concerns remain over the long-term trajectory of U.S.-China trade relations, with the 125% tariff representing a significant escalation.
