'Do not retaliate': White House warns as Trump slaps 125% tariffs on China

US imposes 125 per cent tariffs on all Chinese goods; China hits back with 84 per cent tariffs on all US imports, escalating trade tensions between the world's two largest economies

US President Donald Trump on Wednesday announced a temporary 90-day halt on his recently implemented reciprocal tariff policy, just a day after it took effect. The abrupt decision stirred fears of an intensifying global trade conflict, led to a sharp downturn in financial markets, and added concerns about a potential worldwide economic slowdown. Despite this pause, Trump also declared an immediate hike in tariffs on Chinese imports, raising the rate to 125 per cent from the earlier stated 104 per cent.

  The Trump administration imposed a steep 125 per cent tariff on all goods coming from China, prompting Beijing to retaliate with new import taxes of 84 per cent on all American products. This escalation marked another spike in the ongoing trade dispute between the world's two largest economies, contributing to renewed market instability. 

“I did a 90-day pause for the people who didn’t retaliate because I told them if they retaliate, we’re going to double it,” Trump said while announcing the increased tariffs targeting China. 

Despite the pressure, China responded firmly by raising its import tariffs on US goods to 84 per cent, up from the previous 34 per cent, as a counter to Trump’s tariff policy. The Chinese government declared its readiness to continue the trade battle, vowing to ‘fight to the end’. 

In the wake of the tariff escalation, the White House issued a warning to other countries: “DO NOT RETALIATE AND YOU WILL BE REWARDED.” 

  Still, China proceeded with its retaliatory move. According to the Chinese state-run news agency Xinhua, the 84 per cent tariff on US imports took effect at 12:01 pm on Thursday.

   

Rationale behind the tariff pause

Explaining the decision to pause the reciprocal tariff, Trump mentioned that more than 75 countries had refrained from taking retaliatory action against the US. He framed the move as a strategic step to give negotiations a chance. 

“...based on the fact that more than 75 countries have called representatives of the United States... 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,” Trump wrote on TruthSocial. 

During the pause period, the US will implement a reduced reciprocal tariff of 10 per cent, he added. 

Defending his approach, Trump portrayed the pause as an example of adaptability in leadership. “You have to have flexibility. I could say, ‘Here’s a wall, and I’m going to go through that wall. I’m going to go through it, no matter what. Keep going, and you can’t go through the wall’. Sometimes you have to be able to go under the wall, around the wall or over the wall,” he said.