Trump pauses reciprocal tariffs for 90 days, ups China's levy to 125%: Live updates

President Donald Trump on Wednesday said he was authorizing a 90-day pause in reciprocal tariffs to all countries except China, on which he was raising the levy to 125% in the latest twist of a saga that has roiled financial markets for a week. The universal 10% tariffs remain in place.

The U.S. markets immediately responded with exuberant joy, as all three major indexes were up by at least 6% − the Nasdaq nearly gaining 10% − by 2 p.m. ET.

Earlier in the day China and the European Union unveiled stiff retaliation fees aimed at countering the U.S. tariffs blitz, while an unfazed Trump urged global companies to set up shop in the U.S. The Chinese Finance Ministry announced 84% tariffs on U.S. goods starting Thursday, up from the 34% previously announced.

“If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end,” the Ministry of Commerce wrote in a document released Wednesday.

The EU said it would impose 25% tariffs on a range of U.S. imports in a first round of countermeasures. The 27-member bloc was facing U.S. tariffs of 20% on most products and higher duties on autos and steel.

Still, the brunt of Trump's wrath was aimed directly at China, which Treasury Secretary Scott Bessent described as a "bad actor'' in addressing reporters in front of the White House shortly after the latest tariffs announcement.

“What we’ve ended up with here, as I told everyone a week ago in this very spot, do not retaliate and you will be rewarded,’’ Bessent said.

Trump has rolled out a flurry of reciprocal levies on trading partners, including one sky-high fee: a tax on Chinese goods of 104%. This after implementing a sweeping tariffs plan that imposed 10% levies on almost all imports, which has not been lifted. Targeted U.S. tariffs of up to 50% on more than 50 nations went into effect Wednesday at 12:01 a.m.

Bessent said more than 75 nations have contacted the administration to open tariff negotiations, adding that those will take place during the three-month pause. Trump, in a post Wednesday on Truth Social, urged Americans to be patient.“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” he wrote.

Developments:

∎ China began sensoring some tariff information on social media. Hashtags and searches for "tariff" or "104" were mostly blocked on social media platform Weibo.

∎ European Union countries were expected to approve the bloc's first countermeasures against U.S. tariffs, joining China and Canada in retaliating after reciprocal tariffs of 20% on select EU goods took effect.

∎ Oil prices fell to four-year lows Wednesday after China announced the additional tariff measures on U.S. goods.

Bessent on China tariff response: 'So what?'

Treasury Secretary Scott Bessent downplayed the impact of China’s 84% retaliatory tariffs on U.S. exports and called a trade war between the U.S. and Beijing “a loser for them.”

“They are the surplus country. Their exports to the U.S. are five times our exports to China, so they can raise their tariffs, but so what?” Bessent said in a Wednesday morning interview on Fox News.

Bessent called it “unfortunate” that China does not want to negotiate trade policy with the U.S. “because they are the worst offenders in the international trading system.”

“They have the most imbalanced economy in the history of the modern world. And I can tell you that this escalation is a loser for them,” he said. “They have some very smart economists, academicians, technocrats within their bureaucracy, and they would be telling the leadership that we do not have the edge here.”

Delta Air Lines CEO: 'Growth has largely stalled'

Delta Air Lines is bracing for impact as tariffs start to affect the travel industry. Ed Bastian, the airlines CEO, said Wednesday during its first quarter earnings report that Delta is scaling back growth plans for this year.

"With broad economic uncertainty around global trade, growth has largely stalled," he said in a statement.

Bookings are already softening from corporate and leisure customers, especially in domestic markets, although according to Delta, premium and international demand remains strong so far. Cirium, an aviation data analytics firm, said bookings are down for summer travel to Europe based on bookings from third-party platforms.

Baldwin: 'China cheats,' but Trump’s tariffs hurt families

Sen. Tammy Baldwin thinks much about Trump’s trade policy is reckless, but the Wisconsin Democrat agrees that China is a bad actor that hurts U.S. workers. Speaking to CNN on Wednesday, Baldwin said she believes “China cheats” because its government subsidizes industry, which creates an unlevel playing field.

“Wisconsin is a state that makes things. We’re a big manufacturing state,” Baldwin said. “But when you have an un-level playing field, you see the results. We lose jobs. We see China being able to undercut and underprice.”

In a news release Wednesday, Baldwin said there is much about Trump’s trade policies that “will only jack up costs for working families,” but that she is glad his administration is closing a trade loophole for China that allows illegal substances and counterfeit goods to enter the country

“I have fought to close this loophole for years to keep our families safe and stand up for Wisconsin workers, and I’ll continue to push Donald Trumpto tackle the fentanyl epidemic, level the playing field for our businesses and give Wisconsin workers a fair shot,” she said.

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US might approach China on tariffs after deals are struck

Bessent suggested Wednesday the U.S. and other allies could approach China about a potential trade deal after the Trump administration first reaches agreements with Japan, South Korea and other countries on tariffs.

“At the end of the day, we can probably reach a deal with our allies − with the other countries that have been good military allies, not perfect economic allies – and then we can approach China as a group,” Bessent said in remarks to the American Bankers Association’s summit.

China is not among the 70 countries that have reached out to the U.S. about making a trade deal following Trump’s universal tariffs announced last week. The full tariffs kicked in Wednesday. China responded Wednesday with retaliatory 84% tariffs on U.S. exports.

The Trump administration has already started negotiations with South Korea and Japan. Bessent said the administration is also meeting with a delegation from Vietnam,

“In terms of escalation, unfortunately the biggest offender in the global trading system is China, and they're the only country who's escalated,” Bessent said, adding that any country that aligns itself with China over the U.S. on trade would be making a serious mistake. “That would be cutting your own throat.”

What do tariffs mean for families?

Price increases triggered by tariffs will be "practically unavoidable” and families should expect to pay “a lot more for almost everything they can buy,” said Emily Gee, senior vice president of inclusive growth at the Center for American Progress, a left-leaning policy and advocacy think tank. 

Summertime already brings added costs for many families, because children aren’t getting meals at school and working parents have to pay for child care. Utility costs can go up in the summer, too. Angela Williams, president and CEO of United Way Worldwide, said she’s worried rising prices will make it even harder for struggling families to afford the basics, like food and rent. 

Tariffs will hit low-income households hardest, Gee said, noting families who tend to buy more expensive items can avoid the price hikes by substituting for cheaper ones even if they have to compromise on quality.

“If you’re someone who’s already trying to make ends meet by being frugal and doing all of that comparison shopping and stretching your dollar, you are just going to have to eat that price increase," she said. 

− Madeline Mitchell

This panel makes the call on recessions

The odds of the U.S. entering a recession are higher today than they were before the trade war began, many experts say. A group of eight economists who serve on the Business Cycle Dating Committee, within a nonprofit research organization not affiliated with the federal government known as the National Bureau of Economic Research (NBER), actually determine whether the economy has fallen into recession. 

A recession is informally considered at least two straight quarters of declining economic output. But the technical definition is “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” according to NBER. The committee considers several factors, when making its determinations, including real income, payroll employment, consumer spending, industrial production and gross domestic product.

“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” NBER says on its website. 

There is no fixed rule on when NBER declares a recession, but the committee’s website says it waits long enough to ensure the peak months in economic activity are “not in doubt.” 

The most recent recession, which began in February 2020, was called in June 2020. It wasn't until July 2021 that the committee determined the downturn had ended 15 months earlier in April 2020. Other determinations have taken up to 21 months, according to NBER's website. 

Recession talk is in the air: But who decides when the US enters one?

Trump makes pitch for moving companies to US

As the tariff war escalated, Trump again made a pitch for companies to open manufacturing plants in the U.S.

"This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing," Trump said in a Truth Social post. "ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!"

Ackman again calls for 90-days pause on trade war

Billionaire Bill Ackman, a vocal supporter of Trump, pleaded for a third time Wednesday for the White House to rethink the trade war.

"If the president doesn’t pause the effect of the tariffs soon, many small businesses will go bankrupt," the influential hedge fund manager said in a post on X. "Medium-sized businesses will be next."

Ackman has been waging a public campaign to pause the policy for the past week as the market has taken significant hits since the Trump administration unleashed global tariffs on U.S. allies and adversaries. But thus far the president hasn't indicated he will back off.

"A 90-day pause will enable (Trump) to accomplish his objectives without destroying small businesses in the short term," Ackman said Wednesday. "May cooler heads prevail."

Shark Tank's 'Mr. Wonderful': 'I've had enough' of China

Many wealthy and high-profile allies have spoken out against Trump's global trade war, but there are still some who think waging it against China is the right move. Kevin O'Leary, known as "Mr. Wonderful" on the reality television series "Shark Tank," is among them. He said China has never played by international trading rules, and that many voters may not like Trump's style but that the president is standing up for American businesses and entrepreneurs who've had their intellectual property stolen.

"This is not about tariffs anymore," O'Leary said on CNN. "Nobody has taken on China yet. Not the Europeans, no administration for decades. As someone who actually does business there, I've had enough."

But Trump's approval numbers are beginning to falter as Americans see their 401(k) plans suffer significant losses. A Reuters/Ipsos poll last week showed the president's approval rating fell to 43%, down 4 points from a similar survey when he took office in January.

What is a stock market correction?

Correction territory is generally understood to mean a stock market indicator has dropped at least 10% from its recent market high. This is different from bear market territory, which refers to a stock market drop of 20% or more from a recent peak, or a closing high. 

Every investment is susceptible to corrections. They can apply to individual stocks, bonds, or stock indexes such as the Dow, S&P 500, and Nasdaq. 

Several things can prompt a correction, including a change in economic policy, newly released jobs or inflation data and company earnings reports.