In a surprise move aimed at calming global markets, US President Donald Trump has announced a 90-day pause on tariffs for most countries. However, China has been explicitly excluded from this temporary relief, with Trump escalating the tariff rate on Chinese goods to a massive 125%, intensifying the already volatile US-China trade war.
China Left Out of Tariff Pause, Hits Back
The announcement comes just days after Trump imposed a 104% tariff on Chinese imports, prompting a strong response from Beijing, which declared “countermeasures” and accused the US of engaging in “tax blackmail.” China responded with a 34% retaliatory tariff on American goods and vowed not to bow down to US pressure. “We will not yield to unilateral pressure. This is tax blackmail and economic coercion,” Chinese officials stated.
Trump’s decision to leave China out of the tariff pause and instead increase the duties to 125% is expected to escalate tensions further between the two largest economies.
Trump Accuses Foreign Nations of “Plundering” US Economy
President Trump defended his aggressive tariff strategy on Truth Social, saying that foreign countries have been “levying harsh duties on American products and plundering the US economy” for decades. “We are finally fighting back. The USA will no longer be taken advantage of,” Trump posted.
Markets React: S&P 500 Drops Below 5,000
The ongoing trade tensions have sent shockwaves through global markets. On Tuesday, US stocks plunged for the fourth consecutive day, with the S&P 500 closing below the critical 5,000 mark for the first time in nearly a year.
- The S&P 500 is now down 19% from its recent peak on February 19.
- If the index drops by just 1% more, it will officially enter a bear market.
- An estimated $5.8 trillion in stock value has been wiped from S&P 500 companies in the past week alone.
Also Read: ‘They’re kissing my a**’: Trump boasts of global surrender as tariff blitz hits China, India
Global Markets Also Hit
The ripple effect of the escalating trade war has reached Asian markets, with major indices seeing significant losses:
- Japan’s Nikkei and India’s Sensex faced sharp sell-offs.
- Investors are bracing for further volatility amid fears of a global economic slowdown triggered by worsening US-China trade relations.
China and EU Retaliate Against US Tariffs
Earlier, China had responded to Trump’s 104% tariff with its own retaliatory blow, increasing duties on American goods to 84%. This escalation follows an earlier hike of 34% by Beijing. Meanwhile, the European Union joined the backlash, approving retaliatory tariffs targeting approximately €21 billion ($23.2 billion) worth of US goods. These levies will impact key American exports including:
Also Read: EU finally retaliates against Trump’s tariffs, announces it’s fresh counter-measures against the US
- Soybeans from Louisiana
- Agricultural products
- Poultry, motorcycles, and diamonds
EU officials have reportedly aimed the tariffs at politically sensitive US states ahead of the upcoming presidential elections.
India Also Faces New Tariffs
India is also feeling the heat, with a 26% US tariff on Indian goods taking effect Wednesday. New Delhi is currently assessing the economic and diplomatic fallout from Washington’s move.
Wall Street Reacts: Market Swings Amid Tensions and Temporary Relief
Amid rising global tensions, Wall Street opened mixed on Wednesday morning. The S&P 500 initially rose by 0.3%, while the Dow Jones Industrial Average was down 34 points and the Nasdaq Composite saw a 1.1% gain. However, a midday announcement by Trump offering a 90-day pause on most reciprocal tariffs sparked a strong rebound:
- Dow Jones surged 2,169.93 points (+5.76%) to 39,801.82
- S&P 500 jumped 321.89 points (+6.46%) to 5,304.66
- Nasdaq Composite soared 1,229.20 points (+8.04%) to 16,497.11
In another post, Trump urged Americans to “BE COOL!” and said: “Everything is going to work out well. The USA will be bigger and better than ever before!”
“THIS IS A GREAT TIME TO BUY!”
