The staggering US tariffs on the world’s second-largest economy have triggered a tit-for-tat trade war that has unnerved global financial markets. Stocks fell on Thursday, one day after the biggest buying spree in years. The S&P 500 Index sank more than 6%, before paring losses, as euphoria gave way to unease with investors bracing for more trade hostility.
Trump, however, pointed to Wednesday’s upswing after he announced a 90-day pause on higher tariffs on dozens of trading partners, saying “we had a big day yesterday.”The president and top Cabinet officials said they have been working with foreign nations to bring down trade barriers. “Everybody wants to come and make a deal,” he said.
Treasury Secretary Scott Bessent said that his department, as well as the Commerce Department and the US Trade Representative, would be involved in the discussions, as well as Trump himself.
“We’re putting a process in place,” Bessent told the president. “And as you said, you’re going to be part of the negotiation.”
Commerce Secretary Howard Lutnick said nations are making offers “they never, ever, ever would have come with, but for the moves that the president has made.”
The tariffs are far above the level many economists said could decimate US-China trade, and the overall tariff level could send shockwaves through the economy. Even after Trump’s pause, American average import taxes are still rising to a modern historic level of 24%, according to Bloomberg Economics.
Trump is imposing a 125% charge designed to both counter America’s trade deficit with China and punish Beijing for retaliating against US import taxes. The number, published in a White House memo Thursday, comes in addition to a 20% levy put into place earlier this year over China’s role in fentanyl trafficking.
Other Chinese imports, such as materials used in solar panels, are already subject to import taxes.
Tariff Confusion
Trump’s tariff rollout has been marked by confusion, as the president has repeatedly shifted course. Large placards with tariff rates displayed at the president’s 2 April announcement were inconsistent with numbers the White House published in its official order, and the formal rates were later changed to reflect the figures on the posters.
The president on Wednesday abruptly announced plans to put off higher levies on dozens of nations hours after they went into place, following a bond-market rout, even as he escalated his trade fight with Beijing.
The US’s other trading partners will face a 10% blanket import tax to allow time to negotiate individual trade agreements. If that doesn’t succeed, the higher duties are set to go into place on 9 July.
The president’s order published Thursday also raised duties even further on small packages from China that were previously not taxed, which could hit American shoppers purchasing goods from retailers like Temu and SheIn Group Ltd.
