U.S. President Donald Trump said Wednesday he is pausing his so-called “reciprocal” tariffs for 90 days on countries facing rates higher than his 10 per cent baseline, after the White House said more than 75 countries have asked to begin trade negotiations with the U.S.
The pause, announced hours after his global tariff policy took effect at midnight Wednesday, will bring the tariff rate down to 10 per cent for all countries except China, which will now face a staggering 125 per cent levy on all goods exported to the U.S. after retaliating further in the ever-evolving trade war.
“I did a 90-day pause for the people that didn’t retaliate,” Trump said outside the White House later on Wednesday, acknowledging people were “yippy” and “afraid” due to declines in global financial markets.
“A deal can be made with every one of them,” he added. “There will be fair deals for everybody, but they weren’t fair to the United States. They were sucking us dry, and you can’t do that.”
U.S. markets surged in response to Trump’s announcement after sharp losses in the morning and a week of vanishing wealth on Wall Street and world markets due to uncertainty over the global economy since the “reciprocal” tariffs were announced.
Trump later told reporters in the Oval Office the idea of a pause, which he had previously insisted was not on the table, came together early Wednesday morning and was issued “from the heart.”
The pause does not affect ongoing sector-specific tariffs on foreign steel, aluminum and auto industries, or the 25 per cent tariffs on Canadian goods outside of free trade rules and 10 per cent levies on Canadian energy related to fentanyl.
A White House official told Global News on background that Canada and Mexico remain exempt from the 10 per cent baseline tariff. The White House has previously said the two countries will face a 12 per cent “reciprocal” tariff if the fentanyl-related tariffs are removed.
“Despite being America’s closest and most reliable business partner, we’re still being treated worse than almost anyone — second only to China,” Matthew Holmes, executive vice president and public policy chief at the Canadian Chamber of Commerce, said in a statement.
The White House further clarified the 90-day pause and the 10 per cent baseline tariff applies to “everyone” else, including the European Union, which had been facing a higher 20 per cent rate. The official said the pause for the EU was because Europe’s retaliatory tariffs have not yet gone into effect.
Prime Minister Mark Carney called the pause “a welcome reprieve for the global economy” in a social media post.
China faces 125% tariffs after retaliatory ‘own goal’: Bessent
U.S. Treasury Secretary Scott Bessent said Vietnam, Japan, South Korea and India were among the countries he and other Trump administration officials were speaking with on new, individual trade deals.
“Every country in the world who wants to come and negotiate, we are willing to hear you, we’re going to go down to a 10 per cent baseline tariff for them,” he told reporters outside the White House.
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“China will be raised to 125 (per cent) due to their insistence on escalation.”
The new rate for China was the latest in a tit-for-tat trade war that has seen both countries increase tariffs on each other since Trump announced his reciprocal tariff policy last Wednesday. That program, which the White House says reflects countries’ tariffs and trade deficits with the U.S., set a 34 per cent rate for China on top of existing 20 per cent levies on Chinese goods.
China vowed to match the 34 per cent rate and ultimately raised duties on the U.S. to 84 per cent Wednesday, after the U.S. upped the Chinese tariff another 50 per cent.
Trump sounded optimistic that a deal could ultimately be reached with China, but said Beijing would have to back off from retaliation and seek talks with his administration.
Bessent said China’s continued escalation was an “own goal” that was a result of Trump’s overall strategy on forcing countries to the negotiating table.
“You might even say that (Trump) goaded China into a bad position,” he said. “They have shown themselves to the world to be the bad actors. We are willing to cooperate with our allies and with our trading partners who did not retaliate.
“It wasn’t a hard message: ‘Don’t retaliate, things will turn out well.’”
Consumer prices in Canada and around the globe are likely to be impacted by the trade war between the U.S. and China, the world’s two largest economies.
Pause comes after days of confusion
The pause and promises of global trade talks came after days of confusion and conflicting messages from Trump administration officials on whether the reciprocal tariffs could be negotiated lower or eliminated altogether.
Trump himself had said his tariffs “give us great power to negotiate” while insisting they are also “here to stay.”
“I’m telling you, these countries are calling us up, kissing my ass,” he said during a speech at the National Republican Congressional Committee Dinner on Tuesday night.
Bessent said Trump “wants to be personally involved” in what he said will be a “separate, bespoke negotiation” with each trading partner that comes to the U.S. for discussions.
He also dismissed the huge swings in financial markets worldwide amid the week-long uncertainty over Trump’s endgame, which he suggested was part of the overall strategy and a sign of Trump’s “courage” as a negotiator.
“The market didn’t understand, those were maximum levels,” he said, referring to the higher rates for several countries on a tariff list released by the White House last week. “Countries can think about those levels as they come to us to bring down their tariffs, their non-trade barriers.
“The only certainty we can provide is that the U.S. is going to negotiate in good faith, and we assume that our allies will, too.”
Trump himself said he was demonstrating “flexibility” in his approach.
“I could say, ‘Here’s a wall and I’m going to go through that wall, I’m going to go through it no matter what,’ and you keep going and you can’t get through the wall,” he said. “Sometimes you have to be able to go under the wall, around the wall or over the wall.”
Asked how he would make future determinations on possible exemptions, including for American companies hit hard by tariffs, Trump responded: “Just instinctively.”
Carney, who is running as Liberal leader in the federal election, has said he and Trump agreed Canada will enter “comprehensive negotiations” on trade and security after Canadians elect a new government on April 28.
The federal government has retaliated against separate U.S. tariffs on Canadian goods and industries, including 25 per cent duties on nearly $60 billion worth of U.S. products.
Wednesday also saw the start of Canadian counter-tariffs of 25 per cent on American-made vehicles and auto parts that don’t comply with the Canada-U.S.-Mexico Agreement (CUSMA) on free trade.
Holmes, of the Canadian Chamber of Commerce, said the fact U.S. tariffs on Canada remain in place despite the pause for most other countries is a “missed opportunity” to repair the cross-border trade relationship.
“Today’s missed opportunity is another sign for Canadian businesses that we can’t rely on the U.S. any longer,” he said.
—With a file from Global’s Reggie Cecchini
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