Trump Pauses Most Tariffs, Raises China Rate to 125% — Markets Surge on Surprise Move

In a dramatic policy shift, U.S. President Donald Trump has announced a 90-day pause on new tariffs for most countries under his “reciprocal” trade agenda. However, China remains an exception. Trump simultaneously raised tariffs on Chinese imports to an eye-watering 125%, citing ongoing economic hostility and Beijing’s own recent hike in tariffs on U.S. goods to 84%.

The decision marks a dual-track approach—easing pressure on allies while intensifying economic confrontation with China.

📈 Markets React with Historic Rally

Financial markets responded with euphoria.

• The Nasdaq soared, recording its biggest single-day gain in over two decades.

• The Dow Jones Industrial Average posted its largest-ever one-day point jump.

• Global markets followed suit:

  • Nikkei 225 (Japan) rose 8.8%

  • ASX 200 (Australia) gained 5.1%

  • Kospi (South Korea) climbed 5.2%

Investors appeared to welcome the easing of trade pressures globally, even as tensions with China remained front and center.

🌍 Global Outlook: Uncertainty Amid Optimism

While markets surged, economists warn that the divide between Washington and Beijing could worsen. Heightened tariffs on China may disrupt global supply chains and stir inflation, even as the broader pause brings temporary relief to international trade partners.

As the 90-day window ticks down, all eyes are now on how China will respond—and whether any negotiations can break the deadlock.