Trump's two big announcements - 90 days break on tariffs, but 125% tax on China, turmoil in global trade

New Delhi, April 10, 2025: US President Donald Trump has made two important announcements on Thursday, which can have a profound impact on global trade and economy. Trump has announced a 90-day break (suspension) on tariffs (import duty) for most countries, but at the same time increased the tariff on China by 125%. This move can further increase volatility in global markets, where the stock market has been witnessing huge fluctuations for the last few days.

What are Trump's announcements?

1. 90-day tariff break: Trump said in a post on Truth Social on Wednesday, April 9, 2025 that more than 75 countries have approached the US for trade talks and none of these have retaliated against the US. So, he has suspended the "reciprocal tariffs" for these countries for 90 days and brought the duty down to 10% during this time. The move provides relief to countries that were affected by Trump's recent "Liberation Day" tariff policies.
2. 125% tax on China: There is no relief for China, however. Trump said that China has shown "disrespect for world markets", so the tariffs imposed on it have been increased to 125% immediately. The move further intensifies the ongoing trade war with China, where Beijing has already imposed retaliatory tariffs of up to 84% on US goods.

The announcements were made on Wednesday afternoon, following which global stock markets saw a sharp surge. The S&P 500 index climbed 9.5% and the Nasdaq 12.2%, marking one of the biggest single-day rallies since 2008 and 2001.

Why was this decision taken?

US Treasury Secretary Scott Bessant said that this was part of Trump's "long strategy", and this decision has nothing to do with the instability in the market. Bessant told reporters outside the White House, "Trump applied pressure at the right time and now it is an opportunity for those countries that want to come to the negotiating table." He also informed that countries like Japan, South Korea, India and Vietnam, which are located in the vicinity of China, have approached for trade talks.

However, opposition leaders and experts have termed this move as "chaos". Senate Minority Leader Chuck Schumer said, "Trump's policies are destabilizing the market, and this decision reflects differences even among his own advisors."

Increased pressure on China

The decision to increase tariffs against China by 125% has come at a time when Beijing has increased retaliatory tariffs on American goods. The Chinese Commerce Ministry said that it will "fight to the end" and counter the "economic intimidation" of the US. Trump said he is ready to talk to Chinese President Xi Jinping and hopes China will come forward to strike a deal soon.

#TrumpTariffs, #ChinaTradeWar and #USChinaTariff are trending on social media. Many users have termed Trump's policies as "unsustainable" and "dangerous", while some have called it a step towards "economic independence" for the US.

Global impact

The announcement could impact not only the US and China, but other countries as well. Canada and Mexico still have 25% tariffs in place, although some items are exempted under the USMCA (United States-Mexico-Canada Agreement). The European Union also planned retaliatory tariffs, but it has been postponed after Trump's 90-day break.

Experts believe the move could impact global supply chains and inflation. Economists at JP Morgan have warned that a baseline tariff of 10% and a 125% tax on China could put a long-term burden on the economy.

Conclusion

These announcements by Trump mark a new twist in global trade policies. While the 90-day break brings relief to some countries, a 125% tax on China could further escalate tensions between the US and China. It will be important to see in the coming days what results these talks bring and what impact it has on the global economy.