US halts tariffs for 90 days after China, EU strike back

US stocks jumped the most since March 2020 and short-term Treasuries tumbled after President Donald Trump paused the highest tariffs on countries that have not retaliated, a group that excludes China.

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The S&P 500 Index rose more than 7% as of 11:25 p.m. India time. The Nasdaq 100 Index surged 9%. The Dow Jones Industrial Average rallied almost 6%. The two-year Treasury yield hit 3.8%.

"I have authorized a 90-day pause, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately," Trump posted on Truth Social. "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," Trump continued.

Earlier, China and the European Union (EU) struck back against import tariffs announced by the US, sending equity and bond markets into a spin and signaling a deepening rift between the world's biggest economic powers.

In a statement Wednesday, China's finance ministry said it will impose an 84% tariff on all imports from the US starting April 10, revising the 34% retaliatory tariff it had announced earlier. China's move came hours after America's steepest tariff in a century went into force, taking Trump's duties on Beijing this year to 104%.