President Donald Trump said Wednesday he is pausing and lowering reciprocal tariffs on more than 75 countries that have called for trade negotiations and will raise tariffs on goods imports from China to 125 percent effective immediately. Trump announced the change in policy on Truth Social, altering a course he set only last week. The news caught Republicans in Congress off guard. Members of the House Ways and Means Committee defended Trump's aggressive policy in a hearing with U.S. Trade Representative Jamieson Greer even as Trump disclosed his decision. The news sent U.S. equity markets sharply higher after several days of deep declines amid conflicting messages from administration officials, including some who said there would be no change in course. Trump didn't name the countries, but the administration later said that it included the 27-member European Union. “Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10 percent, also effective immediately,” Trump said on social media. But Trump continued with his aggressive actions − and rhetoric − regarding China, one of the biggest U.S. trading partners. “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 percent, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump posted. The president’s action is the latest escalation in the trade conflict with China. His increase in tariffs comes hours after China said it would raise its retaliatory tariffs on all U.S. goods and services from 34 percent to 84 percent. Members of the European Union voted today that members had agreed on retaliatory tariffs that would go into place within a week. But the EU also noted " its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial." The administration said Trump's pause would apply to the EU because it's retaliatory tariffs haven't yet gone into effect. The administration’s announcement of reciprocal tariffs last week left many economists puzzled about the rationale and concerned about the impact on prices and the economy. The reciprocal tariffs were based on the U.S. trade deficit with the relevant country, but included countries that rarely enter the U.S. trade discussion and in some cases appear to export raw materials that the U.S. doesn’t produce. Greer was testifying to the House Ways and Means Committee when the news broke. “I don't disclose my conversations with the president,” he told the panel. But Greer acknowledged he knew of the pause. “Well, my understanding is that because so many countries have decided not to retaliate, we’re going to have about 90 days,” Greer said. “I understand that it's 90 days, I haven't spoken to the president since I’ve been here.”
