Trump Freezes Most Tariffs for 90 Days, Escalates Trade War with China

U.S. President Donald Trump declared a 90-day halt on his sweeping tariff hike aimed at most nations, an apparent softening of a trade policy that had upset otherwise calm global markets. But it still continues to hit China hard: the announcement disclosed that its planned steep tariff of 104 percent on Chinese imports would be raised instead to a whopping 125 percent.

China Faces the Heat

Trump has raised the tariff on Chinese imports, first to 104%, and then, somewhat absurdly, to 125%. He claimed these tariffs were long overdue and justified by what he called a long history of Chinese trade exploitation and a lack of respect for global trade rules.

China lost no time to reply. Within hours, it slapped an 84 percent tariff on U.S. goods, escalating tensions in a situation that looks ever more like a trade war. This latest confrontation follows earlier rounds of tariff retaliation and adds additional strain to a relationship that was already defined by suspicion and economic rivalry.

Global Fallout and Market Whiplash

The very first imposition of Trump's all-encompassing tariffs had prompted big sell-offs in all the main stock exchanges around the world. Yet, after the 90-day delay was announced on these tariffs, at least for now, the price for several shares shot back up.

The Dow Jones gained nearly 3,000 points. That's close to an 8 percent increase. The S&P 500 was up by over 9 percent. And would you believe it, the tech-heavy Nasdaq was up more than 12 percent in just one day?

Even with this rally, analysts are still uncertain. Trump's tariffs on steel, aluminum, and certain drugs are still making the rounds. And there are more and more questions being raised about the potential fallout for the Indian pharmaceutical industry, which supplies almost 40% of the generics U.S. consumes. This could be Trump's next target.

Harsh Rhetoric, Unpredictable Strategy

Trump's language has garnered even his supporters' criticism. He asserted that global power brokers are pleading to negotiate, and he used the most basic expressions imaginable to convey their enthusiasm. This, of course, is just how the guy talks, but it led some voices on Trump's right flank to question whether his papal visit part two is really what America needs right now.

Although his tone is confrontational, Trump insists that his approach serves American workers and not the interests of multinationals. Even allies, though, are starting to wonder whether his aggressive trade agenda is worth the long-term cost.