Originally published 04/09/25 at 02:19 p.m.
President Donald Trump has sharply increased tariffs on Chinese imports to 125%, citing China’s “lack of respect” for global markets. The move comes just hours after Beijing announced an 84% tariff on U.S. goods, a direct response to Trump’s earlier 104% levy on Chinese products. However, tariffs on imported vehicles and auto parts will remain at 25%, as do those on aluminum and steel, despite widespread uncertainty earlier in the week.
The announcement comes just hours after China retaliated with an 84% tariff on U.S. imports, following Trump’s earlier imposition of a 104% tariff on Chinese goods.
Earlier today, Trump wrote in a Truth Social post:
Treasury Secretary Scott Bessent confirmed that the pause does not apply to “sectoral” tariffs like those on autos, steel, and pharmaceuticals. However, the White House has not clarified how it will determine compliance with the U.S.-Mexico-Canada Agreement (USMCA), which may exempt some vehicles and parts from tariffs—leaving supply chains in flux.
Canada and Mexico, though not initially named in the reciprocal tariff list, are subject to the 10% import duty under the pause. In addition, the administration said the temporary reduction follows outreach from over 75 nations seeking to negotiate trade terms. China was the only country to respond with direct retaliation.
Furthermore, markets surged following the announcement. The S&P 500 rose more than 7%, the Nasdaq jumped 9%, and the Dow gained over 2,000 points. Bond yields eased slightly but still reflected market unease.
Commerce Secretary Howard Lutnick, who advised Trump on the tariffs, said many global leaders are ready to negotiate. At the same time, China has chosen confrontation. Trump emphasized in his post on Truth Social, “The days of ripping off the USA and other countries is no longer sustainable or acceptable.”
While the pause provides relief to many countries, the continued auto tariffs and deepening trade conflict with China leave the U.S. automotive sector facing significant uncertainty.
