In a move described by some as a strategic retreat and by others as a negotiation tactic, US President Donald Trump announced Sunday a 90-day delay in implementing the wide-ranging tariff plan he presented last week. At the same time, he raised the tariff rate on goods imported from China to 125%. A basic 10% tariff on imported goods will continue to be collected.
Following the announcement, Wall Street rallied sharply: the Dow Jones rose by approximately 5.76%, the S&P 500 climbed 6.46%, and the Nasdaq jumped 8.04%.
The new announcement comes in the wake of strong reactions from China and the European Union to the US tariffs. China's Ministry of Commerce announced on Sunday that it would impose 84% tariffs on US-made goods entering the country, in response to a 104% US tariff on Chinese imports. The Chinese government made clear that it intends to "fight to the end" against what it calls the US's "abuse of tariffs."
Despite the president's statement that tariffs would be suspended for countries that had not responded to his plan, it was the European Union that retaliated against a 20% US tariff on EU goods by announcing counter-tariffs on a broad range of American products, ranging from 10% to 25%. These products include cosmetics and makeup, soybeans, motorcycles, poultry, orange juice, rice, tobacco, aluminum and steel, luxury boats, diamonds, and clothing.
Some of the increased tariffs will take effect next week, on April 15, while others will be implemented gradually over the coming months. According to the European Commission, the measures could be suspended if the US agrees to a "fair and balanced outcome to negotiations." For now, the fate of the EU's response plan remains unclear.
