Trump raises China import tariffs to 125% as global markets react

In a move that stunned international markets, Trump raises China import tariffs to 125% while pausing tariffs on most other countries for 90 days. The sudden shift in trade policy was announced online and triggered immediate movement across financial markets, with major indices swinging upwards as the scale of the change became clear.

The announcement means that while the United States will temporarily hold off on new tariffs for many of its trade partners, Chinese imports will face the steepest increases yet, with a 125% tax now applied at the border. The White House said this will apply “effective immediately”, narrowing the broader trade conflict to one squarely focused on China.

A spokesperson confirmed that the existing 10% tariff on global imports remains in place, but that additional duties originally set to hit Europe, the UK, and other major economies have been suspended.

Market analysts noted that such a rapid policy U-turn could have both short-term benefits and long-term complications. On one hand, calming wider global tensions may help stabilise supply chains and prices for consumers, including those in Britain. On the other, the aggressive increase in tariffs against China risks fuelling a more entrenched stand-off between the world’s two largest economies.

Some economists have suggested that the tactic could encourage China to intensify its trade relationships with other regions, particularly in Europe, potentially leaving the UK in a delicate position when it comes to negotiating future terms. You can find a clear breakdown of how tariffs work in practice here.

While this is being pitched as a tactical pause rather than a full retreat, the effects are already being felt. Sterling gained slightly on the news, reflecting cautious optimism that UK businesses could benefit from a temporary easing of pressure in global trade flows.

For the UK government, the announcement raises fresh questions about how to approach trade agreements on both sides of the Atlantic. The situation remains fluid, but one thing is clear: international trade is still being shaped by policy decisions made thousands of miles away.

For more updates on global trade developments and how they affect the UK, visit EyeOnLondon. We’d love to hear your views in the comments.

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