President Donald Trump announced a complete three-month pause on all the “reciprocal” tariffs that went into effect at midnight, with the exception of China, a stunning reversal from a president who had insisted historically high tariffs were here to stay.
But enormous tariffs will remain on China, the world’s second-largest economy. In fact, Trump said they will be increased to 125% from 104% after China announced additional retaliatory tariffs against the United States earlier Wednesday. All other countries that were subjected to reciprocal tariff rates Wednesday will see rates go back down to the universal 10% rate, he said.

“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 said in his social media post. “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,” he wrote.

Speaking to reporters after the announcement, Trump said, “Nothing’s over yet, but we have a tremendous amount of spirit from other countries, including China. China wants to make a deal, they just don’t know how quite to go about it.”

Mexico and Canada won’t face the 10% tariffs, a White House official told CNN. Almost every good coming from the two nations will continue to be tariffed at 25%, unless they are compliant with the US-Mexico-Canada Agreement, in which case they won’t face tariffs. However, that does not apply to sector-specific tariffs Trump has imposed.

Wall Street breathed a sigh of relief, however, that Trump was backing down on other extreme trade measures. Stocks rallied sharply on the news – even though the 10% universal tariff on all imports coming into the United States remained in effect.

The Dow surged nearly 3,000 points or 7.87%, on Wednesday. The S&P 500 shot up 9.5%. The tech-heavy Nasdaq soared 12.2%. This marked the best day for the S&P 500 since October 2008. The Nasdaq posted its best day since January 2001 and its second-best day on record. While the Dow posted its best day in five years.

This comes after markets have been getting slammed by the prospect of the significantly higher tariffs Trump laid out last week.

Hours before making the announcement, Trump said “THIS IS A GREAT TIME TO BUY!!!”

He concluded the post with “DJT,” potentially a nod to Trump Media & Technology Group Corp, which trades under the ticker “DJT.” At the time, the parent of Truth Social, DJT shares were down nearly 13% this month. After the announcement, shares were up over 20% for Wednesday alone.

Trump told reporters his decision to move forward with the pause was in part influenced by people “getting a little yippy yappy.”

“You have to have flexibility,” he added, a stark about-face from recent comments he and administration officials have made recently insisting Trump was not going to back off his promises.

(CNN)

China said on Wednesday that it will raise the tariff rate on all imported goods from the United States to 84 percent, and add 12 more US entities to the export control list.

Beijing’s latest countermeasures followed the US President Donald Trump’s decision to increase the “reciprocal tariffs” on Chinese goods to 84 percent, up from 34 percent.

The Customs Tariff Commission of the State Council, the country’s Cabinet, said in a statement on Wednesday that the US’ decision to escalate tariffs on Chinese goods is “a mistake upon a mistake”.

The US tariff hike, which severely infringes on China’s legitimate rights and interests, damages the rules-based multilateral trading system, and destabilizes the global economic order, is “a clear example of unilateralism, protectionism, and economic coercion”, the commission said.

On the same day, the Ministry of Commerce announced that it will place 12 US entities such as American Photonics and BRINC Drones on its export control management list, effectively prohibiting the export of dual-use items to these companies.

These US entities engage in activities that may endanger China’s national security and interests, the ministry said, stressing that no exporter may violate the aforementioned rules.

(chinadaily)

President Donald Trump is set to impose an astounding 104% in levies across all Chinese imports on Wednesday, White House Press Secretary Karoline Leavitt announced on Tuesday. This comes on top of Chinese tariffs that were in place prior to Trump’s second term.

China was already set to see tariffs increase by 34% on Wednesday as part of Trump’s “reciprocal” tariffs package. But the president tacked on another 50% after Beijing didn’t back off on its promise to impose 34% retaliatory tariffs on US goods by noon Tuesday, adding an additional 84% in duties.

Earlier Tuesday, China’s Commerce Ministry said it “firmly opposes” the additional 50% tariffs on Chinese imports, calling it “a mistake upon a mistake.” The ministry vowed to escalate its retaliation on US exports.

US stocks, which soared Tuesday morning, began moving lower following Leavitt’s comments. Markets ultimately ended the day markedly lower. The Dow fell 320 points, or 0.84%. The broader S&P 500 fell 1.57%. The tech-heavy Nasdaq Composite slid 2.15%.

“Countries like China, who have chosen to retaliate and try to double down on their mistreatment of American workers, are making a mistake,” Leavitt told reporters on Tuesday. “President Trump has a spine of steel, and he will not break.”

“The Chinese want to make a deal, they just don’t know how to do it,” she added. She declined to share what, if any, terms Trump would consider to lower tariffs on China.

Asian markets largely tracked Wall Street’s losses, with Japan’s Nikkei 225 opening about 3% lower on Wednesday. Hong Kong’s Hang Seng also fell 3%. South Korea’s Kopsi and Australia’s benchmark ASX 200 index were each down about 1%.

Along with increasing China’s overall tariff rate, President Trump also signed an executive order Tuesday night tripling tariffs on goods worth less than $800 from the country. As it stands, packages under $800 have been exempt from tariffs through the so-called “de minimus” exemption.

Initially, those goods were set to face tariffs of 30% come May 2. But Trump’s latest executive order hiked the rates to 90%. This will impact Americans who order from sites like Shein, Temu and AliExpress, likely leading to higher prices of the goods.

In February, Trump had initially imposed a 10% tariff on all Chinese goods, with no exceptions, tying it to the country’s alleged role in aiding illegal immigration and getting fentanyl into the US. Last month, he doubled those rates.

China was America’s second largest source of imports last year, shipping a total of $439 billion worth of goods to the US, while the US exported $144 billion worth of goods to China. The mutual tariffs threaten to hurt domestic industries and are poised to result in layoffs.

When Trump’s first term ended, the US charged an average tariff rate of 19.3% on Chinese goods, according to a Peterson Institute for International Economic analysis. The Biden administration kept most of Trump’s tariffs in place while also adding additional ones, bringing the average rate to 20.8%.

Come Wednesday, the total average tariff on Chinese exports to the US will soar to nearly 125%.

Potential countermeasures
China’s state media and social media users have struck a defiant tone to Trump’s threat of additional tariffs. Two influential commentators with links to Beijing shared an identical list of possible countermeasures China could hit back with, citing unnamed sources.

The potential measures include significantly increasing tariffs on US agricultural products such as soybeans and sorghum, banning the import of US poultry, suspending cooperation on fentanyl, limiting market access for services such as legal consultancies, further restricting or banning outright the import of US films and investigating how much American companies earned from their intellectual property in China.

“China does not provoke trouble, but it is not afraid of it either,” wrote Liu Hong, a senior editor at China’s official state news agency Xinhua, who shared the list on his social media account.

The set of measures were also shared by a separate account run by Ren Yi, the Harvard University-educated grandson of the late senior Communist Party official Ren Zhongyi.

While previous rounds of Chinese tariffs caused more American businesses to look to other foreign countries like Mexico and Vietnam to manufacture goods, China remained the top foreign source of many items.

That includes, among others, toys, communication equipment such as smartphones, computers and a wide range of other consumer electronics. All these goods are likely to cost US consumers substantially more soon.

Dozens of other countries as well as the European Union also face a midnight deadline for new tariff rates. Those rates, which Trump laid out last week, range from 11% to 50%.

Leavitt told reporters that despite several conversations with world leaders aiming to negotiate lower tariff rates, Trump has little appetite to delay his plans.

Having spoken with Trump earlier on Tuesday, Leavitt said, “He expects that these tariffs are going to go into effect.”

At the same time, she said Trump instructed his trade team to make “tailor-made” deals with countries that want to negotiate. Pressed further on whether the president had any timeline or deadline for the trade deals, Leavitt again reiterated that they won’t be “off-the-rack deals.”

(CNN)