Washington: In a move that stunned markets and political observers alike, US President Donald Trump on Wednesday announced a 90-day pause on his sweeping tariff regime—granting relief to all countries except China. Just a day earlier, such a reversal had seemed unimaginable.
Trump said the pause was prompted by the cooperative stance of over 75 nations, which had refrained from retaliating against his earlier tariffs. These countries, he claimed, chose negotiation over confrontation. During the pause, a reduced reciprocal tariff of 10% will be in place.
However, Trump made it clear that China would face no such leniency. Citing Beijing's alleged trade abuses and “lack of respect” for global markets, he announced an immediate hike in tariffs on Chinese imports to 125%, up from the earlier 104%.
“At some point, hopefully in the near future, China will realize that the days of ripping off the US and other countries is no longer sustainable or acceptable,” Trump wrote on Truth Social.
Despite repeatedly resisting pressure from within his own party and business circles to halt the tariff spree, Trump’s sudden pivot was reportedly triggered by alarm bells inside the US Treasury Department. According to CNN, Treasury Secretary Scott Bessent raised red flags about a dramatic selloff in the bond market, which, if left unchecked, could spiral into a financial crisis.
Speaking to the media after the announcement, Trump seemed to suggest that the decision came from instinct rather than strategy.
“We didn’t have access to lawyers… We wrote it up from our hearts. You have to be flexible,” he said.
The markets responded instantly. The Dow Jones Industrial Average surged over 2,500 points, while the Nasdaq jumped 12.2%, its best day in 24 years. The S&P 500 rose 6%, oil prices climbed more than 4%, and the dollar strengthened.
Impact on India
India, which had been hit with a 26% customized reciprocal tariff, saw its markets rattled in recent weeks. The pause offers a much-needed breather, as New Delhi works to finalize a multi-sectoral trade deal with Washington.
Ministry of External Affairs Spokesperson Randhir Jaiswal confirmed that talks are underway. “We hope to address these issues and conclude this agreement expeditiously,” he said, underlining the strong economic ties between the two nations.
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