Trump Pauses Tariffs for Most Countries While Doubling Down on China

In a stunning policy reversal, President Donald Trump announced a 90-day pause on increased tariffs for most U.S. trade partners—while simultaneously escalating the ongoing trade standoff with China. The sudden shift came just hours after broad-based tariffs took effect against over 60 countries, sending shockwaves through global markets and fueling recession fears.

Under the updated plan, all nations except China will now face a universal 10% “lowered reciprocal tariff,” a backpedal from the originally proposed rates of up to 100%. However, the tariff on Chinese goods has now surged to 125%, marking the sharpest escalation yet in the U.S.-China trade conflict.

The White House says the decision rewards countries that chose not to retaliate. “Do not retaliate and you will be rewarded,” one advisor told reporters. Trump framed the move as a measured response: “I did a 90-day pause for the people that didn’t retaliate... and that’s what I did with China,” he said, citing what he called Beijing’s “lack of respect.”

Market Volatility and Global Reactions

Global financial markets reacted with extreme volatility. After days of steep losses, U.S. stocks rebounded sharply following the announcement. The S&P 500 closed up 9.5% and the Dow Jones surged by 7.8%—a sharp contrast to the freefall earlier in the week that had wiped out trillions in stock market value.

But while financial markets found some relief, tensions with China deepened. Beijing responded to the new tariffs with its own steep increases—raising duties on U.S. goods from 34% to 84%. China’s foreign ministry condemned the move as “bullying,” adding that resolving trade issues requires “mutual respect and reciprocity.”

A Complex Trade Landscape

The evolving situation highlights the growing complexity of global trade. The European Union, while originally targeted with higher tariffs, has now been spared due to its decision not to retaliate—at least for now. Canada and Mexico remain exempt entirely.

Meanwhile, tariffs of 25% on imported automobiles, car parts, steel, and aluminum remain in effect across the board.

The World Trade Organization (WTO) has raised the alarm, warning that continued escalation could reduce trade between the U.S. and China by as much as 80%, equivalent to a $466 billion decline. “The risks are significant and growing,” said WTO Director-General Dr. Ngozi Okonjo-Iweala.

What This Means for Businesses and Consumers

U.S. consumers may feel the sting of higher prices on electronics, vehicles, and food products, especially those sourced from China. Companies are likely to continue reassessing supply chains and sourcing strategies, with countries like Vietnam and Mexico standing to benefit.

For global businesses and investors, the week’s developments underscore the volatility of geopolitical risk and the speed at which trade dynamics can shift.

Decode Global continues to monitor how these changes will impact investment strategies, supply chain resilience, and economic growth projections. We remain committed to delivering insights that help businesses and individuals navigate these uncertain times.