In a dramatic shift in U.S. trade policy, former President Donald Trump announced Wednesday a temporary reduction of import tariffs to 10% for most nations—while escalating the U.S.-China trade war with a staggering 125% duty on Chinese goods.
The surprise decision comes just days after Trump imposed a wave of reciprocal tariffs ranging from 11% to 50% on nearly 90 countries, sparking market turmoil and urgent negotiations with global trade partners.
Key Developments in Trump’s Tariff Shake-Up
1. 90-Day Tariff Reduction to 10% for Negotiations
- Trump cut rates for most U.S. trade partners from previous reciprocal levels (11%-50%) down to a flat 10%.
- The 90-day pause is designed to allow time for trade negotiations with over 75 nations that reached out after last week’s tariff rollout.
- Stock markets surged on the news, with the S&P 500 jumping 7%—its biggest single-day gain in five years.
2. China Hit with 125% Tariffs “Effective Immediately”
- Trump cited China’s “lack of respect” for global markets after Beijing hiked its U.S. import duties to 84% earlier Wednesday.
- The move escalates the U.S.-China trade war, which had cooled in recent years.
- Tech, manufacturing, and agriculture sectors are expected to feel immediate ripple effects.
3. Reciprocal Tariffs Initially Roiled Markets
- Last week’s announcement of country-specific tariffs triggered four straight days of stock declines.
- The temporary 10% rate is seen as a strategic de-escalation to ease economic pressure while talks proceed.
Behind the Scenes: How the Decision Unfolded
- Commerce Secretary Howard Lutnick revealed he and Treasury Secretary Scott Bessent were present as Trump drafted the announcement on Truth Social.
- Lutnick called it “one of the most extraordinary Truth posts of his Presidency.”
- In a tweet, Lutnick emphasized:“The world is ready to work with President Trump to fix global trade. China has chosen the opposite direction.”
Market Reaction & What’s Next
- Wall Street rallied, with the Dow Jones and Nasdaq also posting massive gains.
- Trade-dependent industries (automakers, electronics, agriculture) are watching closely—new deals could reshape supply chains.
- China’s response will be critical; further retaliation could reignite global trade tensions.
Global Implications: Who Wins & Who Loses?
✅ Winners:
- U.S. negotiators – Leverage to strike better deals.
- Allies like EU, Japan, UK – Lower tariffs ease pressure.
- Domestic manufacturers – Protection from cheap imports.
❌ Losers:
- China – Faces highest U.S. tariffs in history.
- Multinational corporations – Supply chain disruptions likely.
- Consumers – Possible price hikes on Chinese goods