After days of turmoil, stocks on Wall Street and across Asia saw huge surges in reaction to Trump's announcement that he was halting a levy hike for almost all nations for 90 days.
But Trump also said he was raising tariffs on China to 125 percent because of a "lack of respect."
Trump denied that he had backtracked on the tariffs, telling reporters that "you have to be flexible."
"People were jumping a little bit out of line, they were getting yippy, a little bit afraid," Trump said. "Yippy" is a term in sports to describe a loss of nerves.
He said he had been watching the "very tricky" state of the crucial US bonds market before his decision.
"I saw last night where people were getting a little queasy," he said, as US bond yields rose during the stocks sell-off -- a major economic red light as American sovereign government debt is normally seen as a safe haven for investors in troubled times.
Trump also predicted that trade deals will be made with all countries, including China, which has for now, refused to roll back retaliatory tariffs on US goods.
"A deal's going to be made with China. A deal's going to be made with every one of them," Trump said, adding however that China's leaders "don't quite know how to go about it."
Trump also said that he "can't imagine" increasing Chinese tariffs more than he has.
- China duel -
Markets have been on a rollercoaster ride since Trump's announcement of sweeping global tariffs one week ago on what he called "Liberation Day" before his dramatic pause on Wednesday.
Trump had imposed a 10 percent baseline tariffs 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 authorized 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.
Japan -- which had been slapped with 24 percent under the so-called reciprocal tariffs -- said it welcomed the news but still "strongly" demanded that Washington reconsider other levies on its steel and auto exports.
At the same time, Trump ramped up his confrontation with China, which has announced retaliatory tariffs of 84 percent on US imports from 12:01 pm (0401 GMT) on Thursday.
Beijing said Washington's steps pile "mistakes on top of mistakes".
The European Union had earlier launched its own counterattack, announcing measures targeting some US products from next week in retaliation for American duties on global steel and aluminum exports.
The 27-nation bloc will hit more than 20 billion euros' worth of US products, including soybeans, motorcycles and beauty products.
But the EU notably did not retaliate against the separate "Liberation Day" tariffs of 20 percent that came into effect on Wednesday.
- 'BE COOL!' -
Wall Street stocks rocketed on Trump's pause announcement.
The S&P 500 surged 9.5 percent to 5,456.90, snapping a brutal run of losses over the past week.
Markets in Asia on Thursday also rallied, with Hong Kong, Taipei, Australia and Tokyo surging on opening after days of losses.
Stocks in Chinese economic powerhouse Shanghai were also up, despite Trump's decision to further hike tariffs.
And Indonesia's benchmark stock index rallied nearly five percent higher at the open.
Before his pivot, Trump said world leaders were rushing to negotiate "tailored" deals with the United States, with Japan and South Korea among those sending delegations to Washington.
"I'm telling you, these countries are calling us up kissing my ass," Trump told a dinner with fellow Republicans on Tuesday night.
Trump believes his policy will revive America's lost manufacturing base by forcing companies to relocate to the United States.
The billionaire former property tycoon has particularly raged against China, accusing it of excess production and "dumping" inexpensive goods on other economies.
With the trade war between the world's two biggest economies showing little signs of abating, China told tourists on Wednesday to "fully assess the risks" before travelling to the United States.
Separately, US Defense Secretary Pete Hegseth warned against Chinese "threats" as he visited Panama, whose canal is at the center of a row between Beijing and Washington.
Who stands in the crosshairs of Trump's tariffs?
Washington (AFP) April 9, 2025 -
With sweeping tariffs targeting key US trading partners, President Donald Trump sent the world economy into a tailspin Wednesday before backing down hours later -- with a 90-day reprieve for all but China.
Here is a rundown of what tariffs Trump has implemented in his second presidency, as a trade fight between Washington and Beijing again heats up.
- China focus -
China faces the harshest of Trump's tariffs, with a staggering rate of 125 percent.
While Trump's earlier actions brought this year's new US tariffs on Chinese goods to 104 percent Wednesday, he said the same day that he would raise the level further.
The figure included a 20-percent levy over China's alleged role in the fentanyl supply chain, a 34-percent tariff over trade practices Washington deemed unfair and a 50-percent duty after Beijing unveiled retaliation plans.
Beijing, in turn, has matched the last of Trump's actions with an 84-percent tariff on US goods due to take effect Thursday.
Trump's fresh tariffs on Chinese imports stack atop existing ones from previous administrations.
- Global tariffs -
While Trump reserved his heaviest blow for rival China, other US allies and partners have not entirely been spared.
On April 5, US trading partners were slapped with a 10-percent "baseline" tariff, which remains in effect for economies including the European Union, Japan and Vietnam.
There are notable exceptions to this duty.
The United States' immediate neighbors Canada and Mexico, which were earlier targeted over illegal immigration and fentanyl, are not affected by the 10-percent global tariff.
Also off the hook from these are copper, pharmaceuticals, semiconductors and lumber -- although these are sectors that Trump is mulling levies on.
Gold and silver, as well as energy commodities, are also excluded.
- Autos, metals -
There are some sectors that Trump has quickly hit with tariffs.
In March, he imposed a 25-percent levy on steel and aluminum imports.
And early this month, a 25-percent tariff on imported autos took effect, with the rate to eventually affect vehicle parts as well.
But autos imported under the US-Mexico-Canada Agreement (USMCA) can qualify for a lower rate, while compliant auto parts are also tariff-free until a process is set up to target non-US content.
- Canada, Mexico -
Canadian and Mexican imports were initially hard hit by 25-percent US tariffs -- with Canadian energy products facing a lower rate.
Trump targeted both neighbors saying they did not do enough on illegal immigration and the flow of illicit drugs across borders.
But he eventually announced exemptions for goods entering his country under the USMCA, covering large swathes of products, while potash used as fertilizer got a lower rate as well.
- Retaliation -
Besides incoming 84-percent tariffs on US goods, Beijing also earlier retaliated by targeting American agricultural products like poultry, wheat and cotton.
Canada has countered Trump's initial duties and metals tariffs with its own levies on some Can$60 billion in US goods, including steel and computers.
Meanwhile on Wednesday, the EU adopted its first measures hitting back at the Trump administration, targeting over 20 billion euros ($21.9 billion) of American goods like soybeans, motorcycles and beauty products.
The duties will start to be collected mid-April, and came in pushback against Trump's metals tariffs.
- Other threats -
Trump has opened the door for 25-percent tariffs on goods from countries importing Venezuelan oil, a measure that could hit China and India.
He has also threatened similar "secondary tariffs" involving Russian oil.
He previously raised the possibility of tariffs on sectors like pharmaceuticals and semiconductors too, and has ordered investigations into copper and lumber imports.
Washington also has an ongoing investigation into China's practices in the maritime and shipbuilding sector, which could bring about new punitive action.
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