Financial markets throughout Asia experienced a significant upswing on Thursday following US President Donald Trump’s announcement of a temporary suspension of tariffs on most countries, providing a 90-day enforcement pause. Nevertheless, this action did little to alleviate tensions with China, as the United States imposed a substantial 125% tariff on Chinese imports, which elicited a prompt retaliatory response from Beijing.
This development follows several days of financial instability caused by rising trade disputes. While Trump’s 10% universal tariff on imports—excluding China—will continue to be enforced, affected nations have been granted a three-month extension to renegotiate the terms.
Conversely, the trade conflict between the two largest global economies took a dramatic turn. Trump justified the unprecedented 125% tariff increase on Chinese goods by citing a “lack of respect” from China. In retaliation, Beijing swiftly enacted an 84% tariff on all US products, reiterating its stance of not yielding to Trump’s demands.
Despite the prevailing tensions, Wall Street experienced a remarkable surge on Wednesday, with major indices achieving record single-day gains. This positive sentiment carried over into Asia, where markets in Japan, Taiwan, and South Korea recovered a significant portion of their recent losses, fueled by investor optimism that a broader trade crisis might still be averted.
During a Nascar-themed event at the White House, President Trump expressed optimism for future agreements, stating, “What a day, but more great days coming.” He assured that “fair deals” would be established not only with China but with all trading partners.
Our North American correspondent indicates that the tariff suspension may represent a strategic shift by the White House in light of growing economic repercussions. However, the widening divide with China suggests that a resolution to the ongoing trade conflict remains elusive.
