US Tariff Pause Concentrates Trade Tensions on China, Boosting Markets

US Tariff Pause Relieves Markets, Intensifies China Trade War

WASHINGTON/BEIJING/BRUSSELS – President Trump’s abrupt decision to suspend recently imposed tariffs on most nations triggered a global market rebound and eased European concerns, while simultaneously escalating trade tensions with China. This reversal, occurring less than a day after the tariffs took effect, followed a period of extreme market volatility reminiscent of the early COVID-19 pandemic.

The announcement spurred a surge in U.S. stock indices, with positive momentum extending into Asian and European trading. The previous market turmoil, which erased trillions in value and caused a spike in U.S. bond yields, appeared to prompt Trump’s change of course. “People were getting a little yippy,” Trump remarked, attributing the market jitters to overreaction.  

While European leaders, including Commission President Ursula von der Leyen, welcomed the tariff pause and expressed hope for constructive negotiations, China condemned what it perceived as U.S. threats. Trump maintained pressure on China, increasing tariffs on Chinese imports to 125%, up from the 104% implemented on Wednesday.  

China’s Commerce Ministry spokesperson, He Yongqian, asserted that China would “follow through to the end” if the U.S. persisted in its demands. The ministry emphasized its openness to dialogue, contingent on mutual respect. Foreign Ministry spokesperson, Lin Jian, echoed this sentiment, stating that U.S. actions lacked popular support and were destined to fail.  

Beijing may retaliate with further tariffs, having already imposed 84% tariffs on U.S. imports in response to Trump’s earlier measures. Foreign Ministry spokesperson, Mao Ning, shared a video of a defiant 1953 speech by Mao Zedong, signaling China’s resolve.  

Trump indicated that a trade agreement with China remained possible, but his administration would prioritize talks with other nations. Goldman Sachs subsequently lowered its 2025 GDP growth forecast for China to 4%, citing the detrimental impact of tariffs.  

In Europe, the tariff pause led to a rise in euro zone government bond yields and a reduction in expectations for European Central Bank rate cuts. European Commission President Ursula von der Leyen characterized Trump’s move as a crucial step towards stabilizing the global economy.Nguồn và nội dung liên quan