On Thursday, China urged the United States to meet it “halfway” after U.S. President Donald Trump imposed additional tariffs on Chinese goods, but paused tariff hikes on other countries, offering a glimmer of hope to global markets.
Stock markets across Wall Street, Asia, and Europe saw a sharp rebound following Trump’s surprise decision to halt tariff hikes for nearly all countries for a 90-day period. However, in an ongoing escalation with China, Trump raised tariffs on Chinese imports to 125%, up from the previous 104%.
At the same time, China retaliated by imposing its own hefty tariffs on U.S. imports, reaching as high as 84%. This tit-for-tat has further intensified the trade war between the world’s two largest economies.
China’s commerce ministry responded by warning that these tariffs could “severely” harm the global economy, but stressed that China remains open to dialogue. “We hope the US will meet China halfway, and, based on mutual respect, peaceful coexistence, and win-win cooperation, resolve differences through consultation,” said Commerce Ministry spokeswoman He Yongqian.
Further comments from Beijing’s foreign ministry suggested that Trump’s actions were counterproductive, warning that such tariffs were detrimental to the global community.
Despite the escalating tension, Trump remained optimistic. “A deal’s going to be made with China. A deal’s going to be made with everyone,” he stated at the White House. However, he added that Chinese leaders are uncertain about how to proceed.
As Beijing weighs its response, the Chinese government is considering additional stimulus measures to boost its struggling economy, which was already facing difficulties before the trade war began.
While markets have experienced turbulence since Trump introduced a 10% baseline tariff on nearly all countries, his surprise announcement to pause the planned hikes on all nations, except for China, has been welcomed by global investors. However, the baseline tariff of 10% remains in place.
In a rare moment of self-reflection, Trump acknowledged the market’s unease, noting, “I saw last night where people were getting a little queasy,” referring to the rise in U.S. bond yields amid stock market instability. He followed up with an upbeat message on his social media, writing, “What a day, but more great days coming!!!”
Peter Navarro, Trump’s senior trade advisor, hailed the move, calling it “the greatest trade negotiating day we have ever had.” He added that the U.S. was in a strong position to negotiate with more than 75 countries seeking trade deals over the next 90 days.
Meanwhile, Japan, which had previously been hit with a 24% tariff, welcomed the pause but still called for the U.S. to reconsider tariffs on its steel and automotive exports. The Association of Southeast Asian Nations, the U.S.’s main export market, also expressed their readiness to engage in dialogue without imposing retaliatory measures.
In Europe, the European Union welcomed Trump’s decision to pause the tariff increases as an “important step towards stabilizing the global economy.” The EU had earlier launched countermeasures targeting more than €20 billion worth of U.S. products.
The pause announcement caused a dramatic surge in global stock markets. The S&P 500 jumped 9.5% to 5,456.90, snapping a series of losses. Markets in Hong Kong, Tokyo, Australia, Indonesia, Singapore, and Taiwan also rallied, with Taiwan posting a record 9.3% increase. Despite the tariff hikes on China, markets in Shanghai also rose.
Trump has long argued that his tariff policies will restore American manufacturing, forcing companies to relocate to the U.S. He has particularly targeted China, accusing the nation of oversupply and “dumping” cheap goods on global markets.
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