“US Temporarily Suspends Most Tariffs Amid Historic 125% Duty on Chinese Imports: A New Era in Trade Relations”

The White House announced Wednesday that it will temporarily suspend most nation-specific tariffs while significantly increasing duties on Chinese imports to 125%. The move comes as part of the
administration’s evolving trade strategy.

According to Treasury Secretary Scott Bessent, countries other than China will face a standard 10% tariff rate during a 90-day pause period, though sector-specific duties will remain intact. The policy changes took immediate effect following the announcement.

The status of existing tariffs on Mexican and Canadian goods remains somewhat ambiguous. While Bessent indicated these nations were included in the global announcement, previous executive orders had exempted them from reciprocal tariffs, instead imposing a 25% duty on goods not compliant with USMCA trade agreement terms.

The administration’s decision to pause its reciprocal tariff program stems from diplomatic outreach, with President Trump revealing that over 75 nations have initiated contact seeking trade negotiations. Bessent noted that several Asian nations, including Japan, Vietnam, South Korea, and India, are prioritized for discussions.

The announcement provided relief to pharmaceutical companies, whose shares had declined Tuesday following Trump’s statement about impending drug tariffs. Markets rallied after news of the 90-day pause period broke.

Meanwhile, trade tensions between the United States and China continue to intensify. The latest increase builds upon multiple tariff hikes implemented since February, with previous duties on Chinese goods accumulating to 104% before the new rate was announced. In response, China has declared an 84% tariff on U.S. imports, effective Thursday, adding to earlier retaliatory measures.

World Trade Organization Director-General Ngozi Okonjo-Iweala expressed concern about the escalating situation between the world’s largest economies. In a Wednesday statement, she warned that the continuing cycle of retaliatory measures could have far-reaching consequences for global economic stability.

The WTO projects that trade between the U.S. and China could plummet by up to 80% under current conditions. Such a dramatic decrease in bilateral trade, which currently represents approximately 3% of global commerce, could trigger a nearly 7% reduction in global real GDP, according to the organization’s estimates.

The latest development follows months of increasing trade tensions and comes amid broader changes in U.S. trade policy. The administration’s approach has generated mixed reactions from various economic sectors, with some industries welcoming the temporary relief from reciprocal tariffs while others express concern about the potential impact of escalating tensions with China.

The move represents a significant shift in the administration’s trade strategy, potentially opening the door for new bilateral negotiations while maintaining a hard line against Chinese imports. The 90-day pause period appears designed to create space for diplomatic engagement while keeping pressure on China through unprecedented tariff levels.

The ramifications of these policy changes will likely reverberate through global supply chains and international markets in the coming months. While the temporary reduction in tariffs for most nations might ease some immediate trade pressures, the dramatic increase in duties on Chinese goods suggests continued economic challenges in the U.S.-China relationship.