Washington: Facing a global market meltdown, US President Donald Trump Wednesday abruptly backed down on his tariffs on most nations for 90 days, but raised the tax rate on Chinese imports to 125 per cent. It was seemingly an attempt to narrow what had been an unprecedented trade war between the US and most of the world to a showdown between the US and China.
Stock markets in the US rose sharply after the development. The Dow Jones Industrial Average rose 2,541.92 points, or 6.73%, to 40,180.98, the S&P 500 rose 392.26 points, or 7.87%, to 5,375.03 and the Nasdaq Composite rose 1,529.03 points, or 10.00%, to 16,794.65 at about 11:57 PM GMT. Trump posted on Truth Social that because “more than 75 Countries” had reached out to the US government for trade talks and have not retaliated in meaningful way “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10 per cent, also effective immediately.” The 10 per cent tariff was the baseline rate for most nations that went into effect Saturday. It’s meaningfully lower than the 20 per cent tariff that Trump had set for goods from the European Union, 24 per cent on imports from Japan and 25 per cent on products from South Korea. Still, 10 per cent would represent an increase in the tariffs previously charged by the US government. The announcement came after the global economy appeared to be in open rebellion against Trump’s tariffs as they took effect Wednesday, a signal that the US president was not immune from market pressures.