Trump Raises China Tariffs to 125%, Gives 90-Day Relief to Other Countries

Big News: Higher Tariffs on China, Relief for Others

On Wednesday, former U.S. President Donald Trump made a major announcement. He said that the U.S. will now charge a 125% tariff on all goods coming from China. This is one of the highest tariffs ever imposed on any country.At the same time, Trump also announced a 90-day pause on new tariffs for most other countries. For the next three months, these countries will only face a 10% tariff, which is much lower than what was being charged earlier.

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Stock Markets Jump After Trump’s Announcement

Right after the news came out, global stock markets reacted positively. The S&P 500, a major U.S. stock market index, rose by nearly 7%. Investors were happy about the temporary pause in trade tensions, even though details about the new tariff structure were not fully clear. However, experts warn that this bounce may be short-lived if tensions with China continue to grow.

What Do the New Tariffs Look Like?

China: Tariffs raised to 125%
European Union: Reduced to 10% (from earlier 20%)
Japan: Reduced to 10% (from earlier 24%)
South Korea: Reduced to 10% (from earlier 25%)

So, while China faces a big hit, other countries are being given a temporary break.But keep in mind, even the 10% tariff is higher than what was charged a few years ago. So, it’s still not a complete rollback.

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China didn’t stay silent. Just hours after Trump’s announcement, China announced new tariffs of 84% on U.S. goods. This is their way of responding to what they call “unfair treatment.”The European Union and Canada also reacted. They brought back their own tariffs, especially targeting U.S. cars, steel, and aluminum.

Trump says these moves will protect American industries, but many experts are concerned. Here’s why:

Prices may rise: American consumers might pay more for products like electronics, clothes, and cars.
Companies may suffer: U.S. manufacturers that rely on parts from China could face higher costs.
The Federal Reserve is stuck: With inflation still high, the central bank may find it harder to lower interest rates.

A Political Strategy Ahead of Elections

Many believe Trump’s move is also aimed at winning public support ahead of the 2026 midterm elections. By appearing strong on trade, Trump is likely trying to appeal to voters who feel China has taken advantage of the U.S. in the past.However, business leaders and global allies are worried. They want more clarity and hope the U.S. will return to long-term trade agreements rather than sudden changes.

Final Thoughts: Relief or More Trouble Ahead?

While Trump’s decision gave a short-term boost to the markets, the long-term impact is still uncertain.

Will China and the U.S. sit down for talks?
Will this 90-day pause become permanent or lead to more fights?
And most importantly, how will this affect jobs, prices, and businesses across the world?

Only time will tell. For now, the world is watching closely.

Also Read: RBI Revises GDP Growth Outlook and Cuts Repo Rate Amid Rising Global Trade Tensions