US President Donald Trump abruptly paused tariffs on most countries midweek after admitting they made the markets nervous, but doubled down on a brutal trade war with superpower rival China.
Following days of market turmoil, Wall Street stocks saw historic surges in reaction to Trump's announcement that he was halting a levy hike for almost all nations for 90 days.
But Trump said he was raising tariffs on China to 125 percent because of a "lack of respect."
He denied incorrectly that he had backtracked on the tariffs, telling reporters at the White House that "you have to be flexible."
Since returning to the presidency, Trump has imposed waves of tariffs on sectors like steel and aluminium imports, as well as autos.
Most recently, he slapped a baseline 10-percent tariff on most US trading partners – but on Wednesday the president announced a 90-day halt in higher duties for dozens of countries.
Trump confidently predicted this week that trade deals will be made with all countries, including China.
Beijing responded by declaring that US tariffs go "against the whole world."
The tariffs "seriously damage the rules-based multilateral trading system, and seriously impact the stability of the global economic order," warned Chinese Foreign Ministry Spokesperson Lin Jian. "This is a blatant act that goes against the will of the world and goes against the whole world."
Argentina is unlikely to escape the introduction of tariffs unless it can secure a deal with Washington in 90 days – or Trump decides to reverse his position again.
His top economic advisor Kevin Hassett said Thursday that 10-percent tariff for almost all countries except China will likely remain in place going forward.
"I think everybody expects the 10-percent baseline tariff is going to be the baseline," he said. "And it is going to take some kind of extraordinary deal for the president to go below there."
Trump, however, seems keen to throw Argentina a bone – US Treasury Secretary Scott Bessent will make an unexpected visit to Buenos Aires next week to show support for President Javier Milei and his “bold economic reforms,” a US government statement confirmed.
Markets have lost trillions of dollars in value since Trump's announcement of sweeping global tariffs one week ago on what he called "Liberation Day."
Trump had imposed a 100-percent baseline on all countries which came into effect on Saturday, and higher rates on key trading partners like China and the European Union that he accused of cheating the United States, which activated on Wednesday.
But as markets swayed yet again, Trump said in a surprise announcement on his Truth Social network that "I have authorised a 90 day PAUSE" on the higher tariffs, while the baseline 10 percent would remain.
He said that he took the decision after more than 75 countries reached out to negotiate and did not retaliate.
‘Very smart’
In his customary style, Trump on Thursday claimed victory over Europe, though he acknowledged there is a "cost" to his surging trade offensive against China.
The Republican said the European Union had backed off from imposing retaliatory tariffs because of his tough stance on Beijing.
"They were very smart. They were ready to announce retaliation. And then they heard about what we did with respect to China... and they said, you know, 'We're going to hold back a little bit,'" he said.
Trump acknowledged "a transition cost and transition problems," but dismissed global market turmoil. "In the end it's going to be a beautiful thing."
Stocks, oil and the dollar slid this week on fears of a global slowdown in economic activity, while safe-haven asset gold hit new record highs.
Thursday's market losses followed giddy gains on Wednesday in the aftermath of a stunning Trump climbdown.
The dialing back of the planned global trade war left most of the focus on China, the world's number two economy after the United States.
The White House on Thursday clarified that levies on Chinese imports are now at a staggering total of 145 percent – not the previously reported 125 percent.
This was because the latest tariff hike comes on top of a 20 percent tariff already imposed earlier. China has retaliated with levies of 84 percent on US imports.
Plan?
Trump says he wants to use tariffs to reorder the world economy by forcing manufacturers to base themselves in the United States and for other countries to decrease barriers to US goods.
Amid questions over how far Trump is ready to push, the European Union welcomed the US president's partial row-back on his original threat to impose 20-percent tariffs against the bloc.
The 27-nation grouping responded with its own olive branch, suspending for 90 days tariffs on 20 billion euros' (US$22.4 billion) worth of US goods that had been greenlit in retaliation to duties on steel and aluminum.
"We want to give negotiations a chance," EU chief Ursula von der Leyen said in a statement.
She warned, however, that "if negotiations are not satisfactory, our countermeasures will kick in" and that all options remain on the table.
Trump likewise warned that the partial thaw could return to deep freeze after a 90-day truce period.
"If we can't make the deal we want to make... then we'd go back to where we were," he said.
– TIMES/AFP
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