Trump lowers tariffs for most countries to 10%, raises China’s to 125%

President Donald Trump abruptly rolled back newly enacted tariffs for most U.S. trading partners on Wednesday, announcing a temporary 90-day reduction to a flat 10% rate to allow for negotiations—while simultaneously hiking duties on Chinese imports to 125% amid rising trading tensions.

The announcement, which came hours after dozens of countries were hit with steep “reciprocal tariffs” overnight, sent U.S. financial markets soaring. The S&P 500 rose 9.5% by the close of trading, its largest single-day gain in five years, according to CNBC, reversing sharp losses seen since last week.

Trump said more than 75 countries have reached out since he unveiled the sweeping trade overhaul last week, prompting what he described as a pause to encourage dialogue. “Every country in the world wants to come and negotiate,” Treasury Secretary Scott Bessent said, adding that the United States “is willing to hear you.”

The move does not apply to all sectors. According to U.S. officials, existing tariffs on autos, steel, and aluminum will remain unchanged, as will trade preferences for Canada and Mexico under USMCA. Non-compliant goods from those countries remain subject to the broader tariff structure of 25%.

The reduction to a 10% baseline marks a shift from the elevated, country-specific duties that went into effect at 12:01 a.m. ET. Just hours later, Trump took to social media to announce a major escalation in tariffs on Chinese imports, raising the rate from 104% to 125%, citing Beijing’s “lack of respect” for international markets.

China had earlier responded to the U.S. measures with its own tariff hike, raising import duties on American goods to 84%. In a statement, China’s Ministry of Commerce called the U.S. move a “typical unilateral bullying practice,” warning that the trade conflict could spiral further if Washington continued down its current path.

The tariff standoff between the world’s two largest economies has fueled growing concerns of a prolonged global trade war. Economists have warned the measures could disrupt supply chains, raise consumer prices, and dampen international growth.

The White House insists the goal is fairness, not conflict. “Do not retaliate and you will be rewarded,” Bessent said. “We are going down to a 10% baseline tariff for them, and China will be raised to 125% due to their insistence on escalation.”

The broader trade overhaul began on April 2 with Trump’s executive order imposing reciprocal tariffs on countries that maintain barriers against U.S. goods. While the administration refers to the new duties as “kind reciprocals”—roughly half the rate of foreign tariffs—many trading partners were hit with double-digit hikes.

Countries including Vietnam (46%), Taiwan (32%), the European Union (20%), and Lesotho (50%) were among those affected. The measures, which apply to nearly every nation worldwide, represent one of the most significant shifts in U.S. trade policy in decades.

While U.S. markets rallied on Trump’s reversal, business leaders and investors remain wary. “It’s unclear how long this window for negotiations will last,” one analyst told CNBC. “There’s always the risk that today’s reprieve could be tomorrow’s escalation.”

Still, the administration maintains that the strategy is working. “This was his strategy all along,” Bessent said Wednesday. “President Trump has always wanted to bring everyone to the table—but on America’s terms.”