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• US President Donald Trump announced a 125% tariff on goods from China, effective immediately. 
• Tariffs against seventy-five other countries are paused for ninety days, with a 10% tariff. 
• Trump cited China’s “lack of respect” for world markets as the reason for the increase. 

US President Donald Trump this morning announced he is raising tariffs on goods from China to 125%.

In a post on his favoured platform, Truth Social he said: “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realise that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”

US stocks immediately rocketed higher after Trump’s announcement.

STORY CONTINUES AFTER THE LIVEBLOG

STORY CONTINUES 

The president’s post on Truth Social lifted the three major indexes towards one of their best days on record.

By mid-afternoon, the US market had gained about US$4.8 trillion in market value.

“More than 75 Countries” Trump wrote, “have called to negotiate a solution ... and have not, at my strong suggestion, retaliated in any way, shape, or form.”

Because of that, he wrote, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”

Donald Trump has slammed China's "behaviour". Photo / Getty Images 

During a press conference following the announcement Trump was asked how he could have credibility with so much changing back and forth.

Trump told reporters, “you have to have flexibility”.

“You can’t say, ‘here’s a wall, I’m going to go through it’. Sometimes you have to go around the wall, under the wall ... financial markets, look how much they changed today - you have to be flexible.”

Trump said nothing was over yet and they have a “tremendous amount of spirit from other countries” - including China.

“China wants to make a deal, they just don’t know how to go about it. [They’re] quite the proud people, and President Xi is a proud man.

“I know him very well, and they don’t know quite how to go about it, but they’ll figure it out.

“They’re in the process of figuring out, but they want to make a deal.”

Asked why he posted to “be cool” just hours before announcing a tariff reversal, Donald Trump said he “thought people were jumping a little bit out of line”, Sky ��һ�ǿ����� reported.

“They were getting yippy, you know, were getting a little bit yippy, a little bit afraid.”

He was watching the bond market last night and knew people were getting “a little queasy”, Sky ��һ�ǿ����� reported from Trump’s press conference.

Replying to the suggestion his latest decisions were in response to movement in the bond market, Trump said: “The bond market right now is beautiful.”

“The big move wasn’t what I did today, the big move was what I did on Liberation Day.

“We had Liberation Day in America. We liberated from all of the horrible deals that were made, all the horrible trade deals that were made.”

Magic roundabout

A New Zealand money market expert is describing the latest about-face on US tariffs as a “magic roundabout” with US trade policy moving like a yo-yo and uncertainty in the financial sector sitting at “defcon 5”.

JMI Wealth’s Andrew Kelleher told ��һ�ǿ�����talk ZB’s Mike Hosking the world was living in an alternative universe after today’s tariff announcement pause.

“Crazy stuff continues. The US sharemarket has absolutely exploded to the upside. A 10% move on the Nasdac, 8% moves on the S&P 500, Dow Jones, 6-7. Who knows where that will close?” Kelleher said.

Meanwhile the trade war with China was really “ramping up” and all the “crazily calculated tariffs” were now off the table with a baseline tariff for everyone for the next 90 days.

However, there was confusion in the European market whether it was included in the equation given it too was moving to retaliatory action.

“There are just no facts, there’s a lack of clarity and the usual colourful rhetoric from the White House media spokesperson”, Kelleher said.

He said facts would be great but they seem to be hard to come by.

Kelleher said it seemed the policy around trade and tariffs was being made “on the hoof” and all power was in Trump’s hands.

The Kiwi dollar had jumped on the back of the pause announcement, but uncertainty levels were at “defcon 5” and were driving markets higher.

“But who knows what’s going to be announced next? We’ve just got to sit and wait for this day-to-day yo-yo.

“The magic roundabout I’m calling it.”

Earlier, US Treasury Secretary Scott Bessent said Donald Trump’s “strategy” had played out as planned after the US president paused tariffs for most countries while hitting China harder.

“This was his strategy all along, and you might even say that he goaded China into a bad position,” Bessent told reporters at the White House after Trump’s abrupt backtrack.

He said China was the “most imbalanced economy” in modern history, posing trade problems for the United States and other countries.

“China is the most imbalanced economy in the history of the modern world and they are the biggest source of the US trade problems,” Bessent told reporters, saying US tariffs on Chinese imports have caused its goods to flow into Europe. He said China’s economy poses problems for the rest of the world.

JPMorgan chief Jamie Dimon had said the economy was likely headed for a recession.

More to come.

- Wall Street Journal and AFP with additional reporting by NZ Herald