Trump halts tariffs on most countries for 90 days, imposes 125% levies on Chinese imports

Amid the global market meltdown, US President Donald Trump announced a 90-day pause on tariffs for most countries on Wednesday. However, the levies on Chinese imports was raised to 125%.

Earlier in the day, the US' 104% tariffs on Chinese imports went into effect. In response, Beijing declared an 84% levy on US goods.

The counter-response by the USA was more aggressive, i.e., 125% tariffs on Chinese goods.

Taking to Truth Social, Trump 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. 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."

"Conversely, and 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, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately," he added.

Karoline Claire Leavitt, the White House press secretary, said the walk back was part of Trump's grand negotiating strategy.

"President Trump created maximum negotiating leverage for himself," Leavitt said, adding that the media "clearly failed to see what President Trump is doing here."

"You tried to say that the rest of the world would move closer to China, when in fact, we have seen the opposite effect, the entire world is calling the US, not China, because they need our markets," she added.

Here's how markets responded

Following the development, Dow Jones surged 2,583.69 points or 6.78% to 40,199. The S&P 500 index is up 7.65%, while the Nasdaq gained 9.83%..

GIFT NIFTY, which indicates the performance of Indian benchmark indices, soared 3.36% to 23,243. This suggests a gap-up start for Indian markets on Friday. No trading will take place on Thursday on the occasion of Mahavir Jayanti.

Brent Crude also recorded an increase of 4.20%, rising to $65.46 per barrel. West Texas Intermediate gained 3.96%, reaching $61.94 per barrel.