Trump announces 90-day 'pause' on reciprocal tariffs for all but China; US stocks skyrocket

US President Donald Trump - File Photo

US President Donald Trump on Wednesday announced a 90-day 'pause' on his reciprocal tariffs for all the countries except China. In  his announcement, Trump gave all countries a 10 percent baseline except Beijing, which will see a 125% levy.

Taking to Truth Social platform, Trump credited his decision to pause the full effect of tariffs on the fact that "more than 75 countries had asked for negotiations over the tariffs". Trump said he "authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately."

Meanwhile, Trump he was raising the tariffs imposed on imports from China to 125% “effective immediately” due to the “lack of respect that China has shown to the World’s Markets.”

"Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!" wrote Trump.

Following Trump's announcement of suspension of tariffs on all the countries except China, the US stocks recorded one of the biggest rallies. The S&P 500 skyrocketed 9.52% to settle at 5,456.90. This was the biggest one-day gain since 2008. The Dow Jones Industrial Average advanced 2,962.86 points, or 7.87%, to close at 40,608.45. The markets snapped a brutal run of losses since Trump's "Liberation Day" tariff announcement a week ago.

On Tuesday, Wall Street stocks remained highly volatile while European and Asian stock markets tumbled along with oil. A sharp sell-off in normally safe US government bonds set investors further on edge.

It appears that Trump has listened to calls from investors and major trading partners who have been reeling from his sweeping tariff announcements last week.

While the announcement comes as a breather for the countries, particularly US trading allies, America's heightening trade war with China continues to pose alarming risk to the global markets.

Earlier today, China doubled down, after Trump ramped up the duties he had originally prepared for Chinese goods to a giant 104 percent. Beijing had originally planned a 34 percent tariff on US imports but raised the toll to 84 percent in response.