Trump said that China has shown disrespect for the global market, because of that I am increasing the tariff on China to 125%.
US President Donald Trump on Wednesday halted tit for tat or reciprocal tariffs on more than 75 countries for 90 days. This came into effect with his decision. However, he has not included China in this exemption, but has increased the tariff imposed on it from 104% to 125%. Trump took this action after China retaliated with an 84% tariff.
In simple terms, imposing a 125% tariff on China means that a $100 product made in China will now cost $225 when it reaches the US. The sale of Chinese products will decrease as they will become more expensive in the US.
Trump wrote on Truth Social that China has not shown respect for the global market. That is why I am increasing that tariff to 125%. Hopefully China will soon understand that the days of looting America and other countries are over.
For the countries which will make deals, the tariff will remain 10%. Trump said that more than 75 countries have called US representatives and these countries have not retaliated against the US in any way on my strong suggestion. That is why I have accepted a 90-day pause. This halt on tariffs will provide time to negotiate new trade agreements.
At the same time, Finance Minister Scott Bessant said that this rate will be reduced to 10% for countries willing to negotiate with the US. He said that some goods from Canada and Mexico used to be subjected to a 25% tariff. Now they have also been included in the baseline tariff. However, he did not clarify whether the European Union is included in this baseline tariff or not.
There was a risk of recession and inflation; even Trump’s close aides were against the tariff. 1. Due to the Trump tariff, the global market including the US fell by $10 trillion. However, within a few hours of the decision to stop the tariff, the value of the US stock market increased by $3.1 trillion.
2. Many of Trump’s close advisors and Elon Musk himself had advised to stop the tariff war. Many leaders of Trump’s Republican Party were also against the tariff. Mitch McConnell, Rand Paul, Susan Collins and Lisa Murkowski had called the tariff ‘unconstitutional, harmful to the economy and diplomatically dangerous’.
3. Due to the tariffs, there was an unexpected selling of American bonds. Crude prices fell drastically, this situation was becoming like the Corona period.
4. Wall Street banks had warned that tariffs would lead to inflation, rising unemployment, and recession in America.
5. America imports goods worth $440 billion from China. It has imposed a tariff of 124% on this. Finding an alternative was becoming a big challenge for American companies that import products from China. In such a situation, stopping tariffs on other countries was necessary for the supply chain of these companies.
As soon as the announcement was made, the US stock market rose by 10%. Just 4 hours before the announcement of stopping the tariff, Trump wrote on Truth Social, “This is a great time to buy.” After this, as soon as Trump announced stopping the reciprocal tariff, the stock markets returned to their rise.
The Dow Jones jumped more than 2,600 points (7.1%). The S&P 500 rose 9.5%. The Nasdaq rose 1536 points or 10.3%. This increase in the Nasdaq is the biggest since the recession of 2008. At the same time, shares of companies like Apple, Nvidia, Tesla also saw a jump.
The highest gain was 20.01% in Tesla. Bitcoin also gained 6%. It should be noted that just a day before, the markets around the world had fallen by 4% due to the fear of tariff war.
Why tariffs were raised on China US Treasury Secretary Scott Besant said that Trump has encouraged those countries by withdrawing tariffs, who did not open a front against the US amid the growing trade war. Since China had announced on Wednesday to increase tariffs on the US from 34% to 84%. Therefore, Trump increased the tariff on China from 104% to 125%.
EU also deferred tariff for 90 days 26 countries of the European Union (EU) have also deferred the decision to impose 25% tariff on American goods. On April 9, the EU had announced to impose a 25% tariff on American goods. This tariff was to come into effect from April 15. Hungary was the only country in the European Union that opposed the decision to impose tariff on America.
Despite this, on Wednesday the EU approved the proposal for tariffs on American products worth $23 billion (Rs 1.8 lakh crore).
China is emphasizing on increasing new industry and innovation. China has US government bonds worth about 600 billion pounds (about 760 billion dollars). This means that China has great power to influence the US economy. At the same time, China has also started its preparations.
China has given an additional loan of $1.9 trillion to the industrial sector. This has accelerated the construction and upgrading of factories here. Huawei has opened a research center for 35,000 engineers in Shanghai, which is 10 times bigger than Google’s California headquarters. This will accelerate technology and innovation capacity.
China said- instead of bowing down, we will fight till the end
Amid the ongoing tariff war between China and the US, China said that it would choose to fight till the end rather than bow down to the US ‘by force’. Chinese Foreign Ministry spokesman Mao Ning said that China is not afraid of provocation, it will not back down.
Mao Ning has shared many posts on social media. There is also a video of former Chinese leader Mao Zedong. In it, Mao is saying – We are Chinese. We are not afraid of provocation. We do not retreat. This video is from 1953 when China and America were indirectly face to face in the Korean War.
In the video, Mao says- We cannot decide how long this war will last. It depends on President Truman or Eisenhower or whoever becomes the new President. No matter how long this war lasts, we will never bow down. We will fight until we win completely.
Mao Ning has shared a picture in another post. It is said in it that Americans will buy Chinese goods even though the price is high.
