Trump Announces 90-Day Pause on Reciprocal Tariffs, Raises Levy on China

China will now face a 125 percent tariff, the president announced.

President Donald Trump speaks during a photo opportunity with auto racing officials and champions on the South Portico of the White House on April 9, 2025. Saul Loeb/AFP via Getty Images

President Donald Trump announced on April 9 that he is pausing for 90 days reciprocal tariffs that went into effect earlier in the day, while at the same time raising rates for China.

In a statement posted on social media, Trump said he is suspending reciprocal tariffs that he first announced on April 2—which he dubbed “Liberation Day”—while maintaining a 10 percent baseline tariff across the board.

The president said that more than 75 countries have responded to his tariffs with diplomatic overtures rather than countermeasures, noting that these nations “have not ... retaliated in any way, shape, or form against the United States.”

The Chinese regime, Trump said, showed a “lack of respect” to the world and the United States in how it treats trade. The president announced that he is raising cumulative tariffs on Chinese products to 125 percent from 104 percent. The action followed China’s latest tariff hike, which raised duties on U.S. goods to 84 percent.

“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote.

Minutes after Trump’s announcement, White House press secretary Karoline Leavitt clarified to reporters that the level will be brought down “to a universal 10 percent tariff” for all countries with the exception of China.

White House officials said the 10 percent baseline tariff remains in place for all countries except Canada and Mexico. The European Union’s 20 percent reciprocal tariff is paused, and sectoral carveouts remain unchanged. Fentanyl-related tariffs on Canada and Mexico also stay, with items that don’t meet the requirements of the United States–Mexico–Canada Agreement taxed at 25 percent, except energy and potash, which are taxed at 10 percent.

Speaking to reporters outside the White House on April 9, Trump said that “many more than 75” other countries want to make trade deals with the United States in response to the tariffs.

Trump said the tariffs are a generational opportunity to reorder international trade, reshore industries, and reduce the United States’ massive trade deficit with the rest of the world, which he said was not sustainable.

“Somebody had to do it,” Trump said, adding that the kind of major trade policy shift that his administration has embarked upon with the tariffs requires courage—both from the country’s leadership and the American people.

“Everybody knew you had to do it, but they never had the guts to do it,” Trump said, referring to the use of tariffs to reset global trade arrangements so that they no longer unfairly disadvantage the United States. “It does take guts. It even takes guts for our country to go through it. That’s why I say be cool. ... just be cool, it’s going to work out.”

The president’s April 9 declaration of the 90-day tariff reprieve sent Wall Street soaring.

The S&P 500 gained 474.13 points, or 9.52 percent, to end at 5,456.90 points, with the benchmark index notching its largest one-day point gain on record and its biggest single-day percentage gain since 2008.

Meanwhile, the Nasdaq Composite gained 1,857.06 points, or 12.16 percent, to 17,124.97. The Dow Jones Industrial Average rose 2,962.86 points, or 7.87 percent, to 40,608.45.

Investors panicked last week after Trump’s April 2 announcement of reciprocal tariffs, with stocks on their biggest four-day selloff in five years. Amid the turbulence, the president urged Americans to “hang tough” through what he described as a difficult-but-necessary adjustment period as the policies take effect and ultimately lead to a “historic” end result.

For investors, uncertainty lingers after Trump’s most recent announcement.

“For the time being, Trump’s announcement has led to a rally on stock markets and will probably continue on Thursday when Asian and European markets open,” ING’s Carsten Brzeski wrote in a note. “However, don’t forget that we have been here before with announcements and then we get some pauses, only for the originally announced tariff to be reintroduced again. As such, caution remains warranted—and remember President Trump does need revenue to fund his promised tax cuts.”

Treasury Secretary Scott Bessent said recently that the income generated by the tariffs would fund four key proposals aimed at helping lower-income Americans: eliminating taxes on tips, Social Security, and overtime pay, and making interest payments on U.S.-made auto loans tax-deductible.

“Think what the president is doing here,” Bessent told Tucker Carlson in an April 4 interview. “He is backing into an affordability solution for the bottom 50 percent of wage earners because they’re the ones who will benefit from all four of those programs.”

Bessent projected that the annual revenue from the full slate of Trump’s tariffs could eventually reach $300 billion to $600 billion.

“If we could put on a 20 percent tariff and have the foreigners pay that, and use that money to bring down our government deficit and keep taxes low here, that’s a very unique formula that hasn’t been tried in this country for a long time,” the Treasury secretary stated.

Responding to Trump’s announcement of a 90-day tariff pause, Bessent told reporters outside the White House that the president has said that countries should “not retaliate and you will be rewarded, so every country in the world who wants to come and negotiate, we are willing to hear you.”

Earlier on April 9, Bessent told a conference of bankers that countries that pivot to China on trade could face consequences.

Meanwhile, after Trump’s announcement, Goldman Sachs said it was withdrawing its recession forecast and reverting to its previous baseline estimate for the economy to grow in 2025.