In a major shift that surprised global markets, President Donald Trump announced a 90-day suspension of tariffs on most countries, while sharply increasing duties on Chinese goods to 125%. The decision appears aimed at turning what was a broad trade dispute into a more focused standoff between the United States and China.
Rather than continuing to target nearly every major trading partner, the president now seems to be narrowing the field. The stock market responded quickly and positively — the S&P 500 index soared by 9.5% following the announcement, reflecting relief among investors and hopes for more stability.
The unexpected pause comes after weeks of market turbulence and growing concerns among businesses and consumers. With retirement accounts shrinking and companies warning of lower sales and higher prices, pressure was mounting for the administration to rethink its strategy. Though some White House officials claimed the move had always been part of the plan, others suggested the decision was influenced by falling bond prices and increasing interest rates.
In a post on Truth Social, President Trump said over 75 countries had reached out to the U.S. for trade discussions and had avoided retaliatory actions. As a result, he said, he had approved a 90-day pause and set a temporary 10% tariff rate, effective immediately, for those countries.
Speaking to reporters later, Trump admitted that nervous reactions to the stock market declines helped drive the decision. “People were getting yippy and afraid,” he said. He also noted that he had been closely watching the bond market, describing the recent improvements as “beautiful.”
While the pause affects most countries, tariffs on Chinese goods were raised significantly. The administration said this was part of a broader strategy to isolate China in trade negotiations. Canada and Mexico, meanwhile, will continue to face tariffs of up to 25% due to a separate directive aimed at addressing fentanyl smuggling.
Treasury Secretary Scott Bessent explained that upcoming negotiations will be handled on a country-by-country basis. He described the talks as “bespoke” and emphasized that the U.S. is committed to negotiating in good faith. Although he claimed the pause was due to international interest in discussions, President Trump’s own statements suggested market pressure played a key role.
Conflicting comments came from other officials as well. Commerce Secretary Howard Lutnick insisted the decision was not driven by market fears but by diplomatic outreach from other nations. Meanwhile, businesses had been warning of potential recession risks if the tariffs remained in place, and the bond market had shown clear signs of investor concern.
White House Press Secretary Karoline Leavitt defended the administration’s actions, saying the strategy was working as intended. “The rest of the world is reaching out to the U.S., not China, because they need our markets,” she said, pushing back against criticism of the president’s trade approach.
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Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, warned that the escalating trade tensions between the U.S. and China could harm global economic growth and lead to deeper divisions in international trade.
As countries prepare for the next round of negotiations and markets wait to see what happens next, one thing is clear — while the pressure has shifted, the U.S. trade war is far from over.
