US President Donald Trump sensationally backed down on Wednesday in his global trade war with a ‘universal’ 90 day pause for every country – except for China.
Trump slapped even more levies against China in what has become a full-scale confrontation between the world’s two largest economies.
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“I have authorized a 90 day PAUSE” on higher tariffs that took effect on Wednesday, Trump said on his Truth Social network, saying he took the decision after more than 75 countries had reached out to negotiate and did not retaliate against the United States.
Here’s his Truth Social statement in full:
“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!”
Only a flat rate of 10 percent tariffs on all countries that took effect on Saturday will remain in place.
White House press secretary Karoline Leavitt said that Trump has raised tariffs against China because “when you punch at the United States of America, President Trump is going to punch back harder”.
Leavitt says more than 75 countries reached out to Trump to negotiate, and they have been overwhelmed by the amount of requests.
“In the meantime, there will be a 90-day pause in the reciprocal tariffs as these negotiations are ongoing and the tariff level will be brought down to a universal 10%.”
That includes South Africa which was hit by a 30% tariff.
As reported by The South African website, a delegation of senior South African officials had engaged with their counterparts at the White House.
‘Ripping off’
This marked a stunning reverse from often punishing levies that hit even many of the closest US allies.
But Donald Trump accused China of still “ripping off” his country.
“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 percent, effective immediately,” Trump said.
Trump had only hours earlier ramped up the duties on Chinese goods to a giant 104 percent. China then retaliated by rising tariffs on US imports to 84 percent.
“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,” Trump said.
Following days of global market turmoil, Wall Street stocks surged in reaction to Trump’s announcement.
The rand rebounded in dramatic fashion having traded as low as R19.75/$ earlier in the day.
At the time of publishing, the rand has strengthened to R19.33/$ and R24.77/£ having earlier hit a record R25.35 to the British pound.
Rand watch
| Australian Dollar | 11.88332 |
| Pound | 24.77264 |
| Euro | 21.21213 |
| New Zealand Dollar | 10.92469 |
| US Dollar | 19.33112 |
‘BE COOL!’
The European Union had earlier launched its own counterattack, announcing measures targeting some US products from Tuesday in retaliation for American duties on global steel and aluminum exports.
The 27-nation bloc, which Trump has accused of being created to “screw” the United States, will hit more than 20 billion euros’ worth of US products, including soybeans, motorcycles and beauty products.
But the EU notably did not retaliate against the 20 percent US tariffs that came into effect a minute after midnight on Wednesday.
Trump announced a week ago on what he called “Liberation Day” that he would impose a 10 percent baseline tariff on all countries that took effect on Saturday, with additional rates for economies including China and the EU with a large trade surplus with the United States that took effect on Wednesday.
With markets roiled for the past week, Trump earlier Wednesday urged Americans to “BE COOL!” and said that “Everything is going to work out well”
Wall Street stocks rocketed higher on Wednesday after Trump’s pause announcement.
Minutes after Donald Trump unveiled it, the S&P 500 surged 6.0 percent higher to 5,281.44, snapping a brutal run of losses over the past week.
European and Asian stock markets had earlier tumbled along with oil and the dollar as the confrontation escalated.
US bond yields had also risen amid a sharp sell-off – a major economic red light as sovereign government debt is normally seen as a safe haven for investors in troubled times.
‘Kissing my ass’
Before his pivot, Trump said world leaders were rushing to negotiate “tailored” deals with the United States, with Japan and South Korea among those sending delegations to Washington.
“I’m telling you, these countries are calling us up kissing my ass,” Donald Trump told a dinner with fellow Republicans on Tuesday night.
But China doubled down.
“The tariff escalation against China by the United States simply piles mistakes on top of mistakes,” the Chinese finance ministry said.
US Treasury Secretary Scott Bessent earlier warned countries at a banking summit Wednesday that aligning with Beijing “would be cutting your own throat.”
Trump believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the United States.
The billionaire former property tycoon has particularly raged against China, accusing it of excess production and “dumping” inexpensive goods on other economies.
China warned tourists on Wednesday to “fully assess the risks” before travelling to the United States.
And US Defence Secretary Pete Hegseth then warned against Chinese “threats” as he visited Panama, whose canal is at the center of a row between Beijing and Washington.
Part of a bigger plan – or has Donald Trump realised he may have been wrong?
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By Garrin Lambley © Agence France-Presse
