In a bold move amid intensifying global trade tensions, U.S. President Donald Trump on Wednesday announced a dramatic increase in tariffs on Chinese imports to 125%, while simultaneously declaring a 90-day pause on tariffs for most other countries.

The decision, made public via a post on Trump’s Truth Social platform, sent shockwaves through global markets, which rallied sharply on hopes of a broader trade truce—despite the escalation with China.

“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 wrote. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A. are over!”

Markets Surge Despite China Tariff Hike

The U.S. stock market responded with surprising optimism. The S&P 500 surged nearly 7% following the announcement, reflecting investor relief that tariffs on most nations will be temporarily reduced or paused.

Trump clarified that, apart from China, tariffs on goods from over 75 countries would be lowered to a baseline of 10% for the 90-day period. This figure is significantly below the previous rates, which stood at 20% for the European Union, 24% for Japan, and 25% for South Korea.

“More than 75 countries have contacted representatives of the United States… I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump stated.

While this new 10% tariff represents a reduction from recent spikes, it still marks an increase over the pre-trade war tariff regime.

Global Retaliation Intensifies

China responded swiftly, imposing retaliatory tariffs of 84% on a wide range of American imports. The move reflects growing hostility between the world’s two largest economies, with Beijing warning that it will “fight to the end” if Washington continues down this path.

Trump’s tariffs—described by the administration as “reciprocal”—went into effect just after midnight Wednesday. Under the new structure:

• China faces a total tariff of 125% on all goods.
• European Union products are subject to a 20% tariff.
• Japan faces a 24% duty.
• South Korea sees a 25% levy.

In response, the European Union approved new taxes on U.S. goods, while Canada introduced matching auto tariffs.

Uncertain Road Ahead

The Trump administration has tried to reassure U.S. businesses, lawmakers, and international partners that the new tariff structure is open to negotiation. However, senior officials acknowledge that any substantive discussions or rollbacks could take months.