Donald Trump tariff war: 90-day pause on higher | Australian Markets

US President Donald Trump has spectacularly backflipped on his newly introduced higher tariffs, granting a 90-day pause for many nations whereas escalating a trade battle with China.

The United States and China have entered a regarding and escalating trade battle after Mr Trump introduced a 34 per cent tariff on Chinese imports to the US on “Liberation Day”.

In response, China raised US tariffs to 67 per cent, with Mr Trump shortly firing back to raise his tariff for China to 104 p.c.

Now, after one other 24 hours, Mr Trump says China’s tariff price will now be 125 per cent.

Making the announcement on Truth Social, Mr Trump stated: “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 per cent, effective immediately.

“At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable.”

While slapping the People’s Republic with the escalated price, Mr Trump stated he had authorised a 90-day pause on higher tariffs (above his 10 per cent baseline tariff) for different nations.

“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 authorised a 90-day PAUSE, and a substantially lowered reciprocal tariff during this period, of 10 per cent,” he wrote.

“Effective immediately.”

Speaking from the Oval Office, Mr Trump stated China’s President Xi is his “friend” and that he respects him.

He went on to say that he didn’t blame China for the present trade problem that he claims has damage the United States, as a substitute blaming “stupid” former US Presidents for permitting the the nation to be taken benefit of by others.

A ten per cent blanket obligation on virtually all US imports will stay in place, the White House stated. The announcement additionally doesn’t seem to have an effect on duties on auto, metal and aluminium which can be already in place.

US stock indexes shot higher on the news, with the benchmark S&P500 up more than six per cent. Bond yields got here off earlier highs and the greenback rebounded towards safe-haven currencies.

Earlier on Wednesday, China and the European Union introduced new trade obstacles on US items in response to the already-steep duties imposed by Mr Trump, escalating a international trade battle that has hammered markets and raised the chance of recession.

China introduced a tariff hike on US imports to 84 per cent from 34 per cent hours after Trump’s punitive 104 per cent tariff kicked in.