Trump pauses global trade war but hits China with 125% tariffs

Shares rally as president announces 90-day halt and singles out Beijing

- Callum Jones New York Jennifer Rankin Brussels Rowena Mason

Donald Trump last night shelved plans to hike tariffs on most countries except China by announcing a 90-day pause and pulling back from his global trade war after days of market turmoil and recession warnings.

After insisting for days that he would hold firm on his aggressive trade strategy, Trump announced that all countries that had not retaliated against US tariffs would receive a reprieve - and only face a blanket US tariff of 10% - until July.

As Beijing prepared to slap punishing 84% tariffs on US goods from today, however, Trump said he would raise US tariffs on Chinese exports to 125% effective immediately.

Mexico and Canada will also be hit with a 10% US tariff, according to administration officials, escalating tensions with America's closest trading partners and neighbours.

"More than 75 countries" have contacted the US federal government "to negotiate a solution" since Trump unveiled plans for steep tariffs on their exports, the US president claimed in a post on Truth Social.

Stock markets soared after the announcement.

On Wall Street, the benchmark S&P 500 rallied by 8% and the Dow Jones industrial average jumped 6.6%.

"At some point, hopefully in the near future, China will realize that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable," Trump wrote as he revealed the latest US tariff assault on China. "BE COOL," he had declared earlier yesterday, insisting it was a "GREAT time" for companies to relocate to the US. "Everything is going to work out well," he said.

Ultimately, he opted to back down - setting the stage for three months of frantic negotiations with dozens of countries.