Markets rally as White House backs down from global hike – but China hit with 125% duty
DONALD TRUMP has dramatically paused his plan to impose sweeping new tariffs on dozens of countries, in what critics are calling a “retreat under pressure” – but the former president has simultaneously escalated his trade war with China, imposing a massive 125% duty on Chinese imports.
The announcement, made late Tuesday (Apr 9) via Trump’s Truth Social platform, triggered a sharp rebound on global markets. Wall Street surged, with the Dow Jones rising 8%, the Nasdaq up 12% and other markets around the world following suit.
Despite the White House having dismissed rumours of a tariff pause just 24 hours earlier, the sudden policy shift appears to have been driven by fears of economic backlash and growing discontent from Republican lawmakers and major business leaders.
In Washington, Trump’s Treasury Secretary, Scott Bessent, said the move was “always part of the plan”, insisting the pause was a tactic designed to “bring our trading partners to the table”.
“We’ve had more than 75 countries contact us, and I imagine, after today, there will be more,” Bessent told reporters during a chaotic press briefing.
However, the backtracking comes after what sources close to the administration describe as a weekend of “intense pressure” from Wall Street donors, party insiders and international allies.
“Governing by chaos”
Senate Minority Leader Chuck Schumer accused Trump of “governing by chaos,” and said: “He is reeling, he is retreating, and that is a good thing.”
European leaders also reacted cautiously. The European Commission said it would “pause countermeasures” while awaiting further clarity. But other global powers, including China, have responded with fury.
In a swift response, Beijing announced a raft of retaliatory measures – including tariffs of up to 84% on key U.S. exports. A spokesperson for China’s Ministry of Commerce called the American measures “economic tyranny” and warned of “severe consequences for global trade”.
Muddled message
Confusion reigned throughout Tuesday night, as foreign governments and businesses tried to decipher the details of the new tariff pause. Initially, it was unclear which countries were affected, whether Mexico and Canada were included, or if certain sectors – such as energy or agriculture – would remain exempt.
A follow-up statement from the White House clarified that the 90-day pause applied to most U.S. allies, while “strategic adversaries” would be subject to ongoing or increased tariffs. No definition of “strategic adversary” was provided.
Meanwhile, Trump remained defiant, posting online: “BE COOL! The globalists and the panicans are out of control. America is winning.”
Speaking to reporters on Wednesday (Apr 10), Trump acknowledged the stock market had looked “pretty glum” in recent days and said: “People were getting yippy. I don’t blame them.”
He went on to claim the U.S. economy was suffering from a “long sickness” that only strong protectionist action could fix.
“The art of the backtrack?”
Trump loyalists including trade adviser Peter Navarro insisted the about-face was evidence of “the President’s genius strategy unfolding in real time”.
But critics are less convinced.
Economist Paul Ashworth of Capital Economics said: “This looks less like a strategy and more like panic. The idea that a 10% global tariff was going to save U.S. manufacturing was already shaky – a 125% tariff on China, meanwhile, risks serious blowback.”
Ashworth added that Trump’s “pause” may become a de facto policy, describing it as a possible permanent settlement rather than a temporary truce.
The Herald understands that White House aides have privately described the China escalation as “a bone to throw” to nationalist supporters, while calming international markets with the broader pause.
Uncertain future
The move comes amid Trump’s campaign for re-election and ongoing efforts to consolidate Republican support ahead of this summer’s party convention.
In the short term, markets are recovering. But analysts say the long-term economic impact remains uncertain, with major exporters and importers now forced to re-calculate their global strategies – again.
And in 90 days, if no trade deals are struck, the world could be staring down another round of tariff hikes and financial volatility.
As one EU diplomat put it: “With Trump, the only predictable thing is the chaos.”
