Trump orders sudden tariffs pause as people get ‘yippy’
The American share market has surged after the president paused global tariffs just hours after they kicked in.
US President Donald Trump has dramatically paused global tariffs for 90 days — just hours after steep new export taxes kicked in — but has slammed China even harder.
Trump said the immediate three-month pause was for those nations that did not retaliate. Their tariffs would be reduced to a universal 10 per cent.
The reversal does not affect Australia, which was already on a 10 per cent tariff.
However, China’s tariff would be “immediately” upped even further from 104 per cent to 125 per cent because of Beijing’s “lack of respect”, Trump said.
China had retaliated on Wednesday with a second tariff hit on US goods, which took the total rate on American exports to 84 per cent in a battle of the two largest economies.
“At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable,” Trump posted to Truth Social.
Trump announced his tariffs pause in a social media post on Thursday morning (AEST), just a few hours after he had urged his followers that “THIS IS A GREAT TIME TO BUY”.
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His sudden reversal sent share markets sharply higher after days of tumbling, as Wall Street breathed a sigh of relief.
US Treasury Secretary Scott Bessent said the pause was part of Trump’s “strategy” all along.
The tariffs had kicked only in hours earlier on Wednesday (2pm AEST) after much insistence from the Trump administration that they would go ahead.
Later, Trump said at the White House he had ordered the pause because people “were getting a little bit yippy”.
“I thought that people were jumping a little bit out of line,” he said, while standing with auto racing champions.
“They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid, unlike these champions, because we have a big job to do.
“No other president would have done what I did. No other president. And it had to be done.”
Trump’s trade barriers had hammered markets, raised the odds of recession and prompted retaliatory responses from China and the European Union.
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A 10 per cent blanket duty on almost all US imports will remain, the White House said. The announcement also did not appear to effect existing duties on auto, steel and aluminium.
US stock indexes shot higher on the news, with the benchmark S&P500 up more than 6 per cent. Bond yields came off earlier highs and the dollar rebounded against safe-haven currencies.
Earlier on Wednesday (US time), China and the European Union announced new trade barriers on US goods in response to Trump’s already-steep duties, escalating a global trade war that has hammered markets and raised the likelihood of recession.
China announced a tariff hike on US imports to 84 per cent from 34 per cent hours after Trump’s punitive 104 per cent tariff kicked in.
The EU said it would impose 25 per cent tariffs on US imports in a first round of countermeasures. The 27-member bloc faces US tariffs of 20 per cent on most products and higher duties on vehicles and steel. Countermeasures in Canada, a close US ally and major trading partner, also took effect on Wednesday.
Targeted US duties on dozens of other countries, from Japan to Madagascar, also took effect, the latest in a thicket of tariffs that are unwinding a decades-old global trading order. Tariffs in the world’s largest consumer market now average above 20 per cent, according to various estimates, up from 2.5 per cent before Trump took office.
Japan and Canada have said they will cooperate to stabilise the global financial system — usually a US task in times of crisis.
Trump had shrugged off the market rout and offered investors mixed signals about whether the tariffs would remain in the long term.
“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” he wrote on social media earlier on Wednesday.
Trump has said the tariffs will help rebuild an American industrial base that has withered over decades of trade liberalisation, though he says he is open to negotiating down those barriers with trading partners on a country-by-country basis. US officials, however, said they would not prioritise talks with China.
“The US escalation of tariffs on China is a mistake on top of a mistake, which seriously infringes on China’s legitimate rights and interests and seriously undermines the rules-based multilateral trading system,” China’s finance ministry said.
Beijing also imposed restrictions on 18 US companies, mostly in defence-related industries, adding to the 60 or so American businesses already punished for Trump’s tariffs.
The White House had no immediate comment on China’s latest retaliatory move. Earlier on Wednesday, China called its trade surplus with the US an inevitability and warned it had the “determination and means” to continue the fight if Trump kept hitting Chinese goods.
Global drugmakers’ stocks dropped across the board on Wednesday after Trump reiterated plans for a “major” tariff on pharmaceutical imports on top of existing duties.
Economists say Trump’s tariffs could increase costs for the average US household by several thousands of dollars annually. That could become a political liability for a president who campaigned on lowering the cost of living.
