In an escalating trade war, Donald Trump says he is raising tariffs on China to 125% “effective immediately” after Beijing vowed to impose extra tariffs on the US. Dozens of other countries have been gifted a 10% tariff freeze. Watch as Donald Trump holds an event in the wake of the chaos.
Wednesday 9 April 2025 19:44, UK
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Live reporting by Narbeh Minassian
A bit more now to bring you from Donald Trump’s treasury secretary, who spoke to reporters earlier just after the president’s tariff reversal.
Scott Bessent insisted Trump’s decision to pause most tariffs came after more than 75 countries reached out to the White House to discuss a trade agreement – as we reported at 18.45.
Expanding on those comments, Bessent said Trump strengthened his hand through his tariffs.
“President Trump created maximum negotiating leverage for himself,” he said.
Bessent said the US decided to raise tariffs on China because Beijing hasn’t reached out and instead increased its own levies on US goods.
Liberal Democrat leader Ed Davey has branded the tariff-row back “Donald Trump’s Liz Truss moment”.
“He’s been forced into an embarrassing climbdown.
“Now we need to get him to go further and get rid of his remaining reckless tariffs.
“That means an economic coalition of the willing and uniting with our allies.”
Our US correspondent James Matthews has been at the White House for the past couple of hours.
He watched, little more than an hour ago, when a senior White House official held the Trump line on “fighting the fight”.
Scott Bessent, the Treasury secretary, had been on Fox business earlier to defend the Trump position, looking “something like a hostage video”.
In the past hour, Donald Trump reversed his position to up tariffs on China and announce a 90-day pause on levies for other countries.
“You had the previous position being robustly defended one minute,” Matthews said.
“The very next minute, at the same microphones, Scott Bessent was out beside the press secretary saying ‘look, it’s all changed’.”
“And right now everybody’s our friend except China,” Matthews added, on Trump’s new position.
“We’ve got to have this big trade war. And we are corralling allies behind us.
“That’s my reading of where the strategy is taking them now.”
Value in an alliance
It may be building up to what will be a “tough trade war” with China, a battle Trump will “not want to lose for economic reasons, clearly, but also political reasons”.
“So he sees the value, in constructing an alliance around him,” Matthews said.
“The question would be, why didn’t he construct that alliance from the word go?
“Because China was always the main adversary and the target in all of this. Why have the days of chaos, markets tumbling and so on until we got to this point?”
Certainly, Matthews added, he’s a man who, “in the eyes of many, needed an off-ramp in all of this”.
“And to those same people, he has chosen it. He has chosen today to take that off-ramp.”
A senior Democratic politician has hit out at the trade “chaos” caused by the Trump administration.
Senate minority leader Chuck Schumer said consumer confidence has plummeted and businesses are putting everything on hold, including building new plants, hiring new workers, or launching new products.
“Nobody knows what the heck is going to happen next due to the chaos of this administration,” Schumer said.
“Every day, it becomes worse and worse and worse in terms of the chaos, in terms of the unpredictability and in terms of the logic.
“They keep changing their minds about what they’re doing, why they’re doing it, how they’re doing it – and the only victim is the American public.”
We’ve just got some fresh reaction from the US, where the associate editor of the Washington Post has spoken to us.
Marc Fisher described Donald Trump’s 90-day tariff pause for countries other than China – though the exact details remain unclear – as “classic Trump”.
It’s “damage control”, he told our chief presenter Mark Austin, and “caving when things go bad”.
His administration will “try to spin this as a victory”, he added.
“The press secretary even [said] that this is proof that the president is in it for the long run,” he said.
“Well, the long run lasted about three days. And the turmoil in the markets turned it around.
“The reaction around the world turned it around. This is one more case in a long litany of Trump moves where he creates chaos, spreads fear, and then backs off as soon as things get tough.”
Donald Trump’s treasury secretary is speaking to the media now, trying to clarify the president’s comments.
Scott Bessent says to “every country in the world” that wants to negotiate – “we are willing to hear you”.
“We’re going to go down to a 10% baseline tariff we have for them,” he says.
“And China will be raised to 125 due to their insistence [to] escalate.”
He adds more than 75 countries have called the US to discuss terms, and Washington is ready to negotiate in “good faith”.
That 90-day pause gives time for just that, he says.
Trump’s sudden reversal comes less than 24 hours after steep new tariffs took effect on imports from dozens of trading partners.
Wall Street’s main indexes have risen immediately after Donald Trump’s latest announcement – see the post below.
He said he has authorised a 90-day pause on “reciprocal” and 10% tariffs, which will take effect immediately.
Here’s a little snapshot of how some key indexes have shifted as of 1.26pm in New York (6.26pm UK time):
As of yesterday’s close, S&P 500 companies had lost $5.8trn in stock market value since the tariff announcement last Wednesday.
That’s the deepest four-day loss since the benchmark was created in the 1950s, according to LSEG data.
Donald Trump has posted on social media again, this time to take aim at China.
He’s just said he’s raising the tariff imposed on China to 125% – and that is “effective immediately”.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” he wrote, in remarks we’ve shared unedited.
“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.”
90-day pause
Trump has also said he has authorised a 90-day pause on all tariffs other than those applying to China.
In the same breath, he said tariffs impacting those countries are being lowered to 10%.
It was unclear whether the 10% tariff would come into effect during or after the 90-day pause, and what impact the announcement would have on countries already hit by a 10% tariff, such as the UK.
The president wrote:
“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 authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”
If Donald Trump’s tariffs make British luxury brands more expensive in the US, then the UK could respond with tax-free shopping – so some in the industry argue.
A trade body representing some of Britain’s most famous names has told us the government should be “rolling out the red carpet” for the kind of visitors who are in the market for the most expensive brands.
Helen Brocklebank, the chief executive at Walpole – which represents dozens of brands such as Rolls-Royce and Harrods – told our presenter Darren McCaffrey: “We want them to come here.
“And we should be rolling out the red carpet for those high-value US visitors to come to the UK and buy their famous-name British goods that they really love, here in the UK.”
She called for the revival of the VAT Retail Export Scheme – scrapped by the last government in 2021 – which allowed visitors from outside the EU to reclaim VAT.
“Because what we know is that for every pound a visitor spends on a nice hotel [for example] £8 goes to the local economy and retailing culture,” Brocklebank added.
“So it’s a real dividend that could be unlocked just by unlocking this policy that this government’s inherited from the last one.”
By Helen-Ann Smith, Asia correspondent
China was always going to retaliate – and when it did, it was decisive.
Retaliatory tariffs matched with the US like-for-like, as well as actions against 18 US companies.
When taken in addition to levies that were already in place, import taxes between the US and China are now so high that trade between the two is all but impossible.
The enormity of the world’s two biggest economies essentially ceasing to trade has barely sunk in.
There is a genuine belief at the top levels of the Chinese system that the US’s ultimate goal is to restrain China and undermine its growth. In that context, capitulating to Donald Trump serves no purpose and just isn’t an option.
But there is a sense that there was a degree of restraint behind the rage.
In the end, the measures mainly targeted trade and some of the more political options that would have seriously raised the stakes were avoided.
Perhaps China really does want to avoid escalation, or perhaps it wants to leave some option still open for later.
This moment does mark a real low in US-China relations, because throughout the years, despite all the strife and disagreement, trade was always there as a backstop, the one issue that inextricably linked them.
Without that, it’s unclear what could come next.
You can head to our post at 12.02 (signposted in the key points above) for more on China’s response – which amounts to an import tax of 84% on the US.
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