Trump Blinks in Trade War as Market Turmoil Looms

Al Manar

10-04-2025

US President Donald Trump abruptly paused planned tariff hikes on most countries on Thursday, sending global markets surging with optimism. However, the reprieve was short-lived as Trump simultaneously escalated the trade war with China, slapping a staggering 125% tariff on Chinese imports.
The mixed signals from the White House came amid growing concerns over the impact of the trade dispute on the US economy. Trump acknowledged that he was closely monitoring bond markets, where rising yields had sparked 'a little queasy' among investors.
While the president claimed he was being 'flexible' in pausing tariffs for nearly all countries, the move to dramatically ramp up pressure on China marked a dramatic escalation in the deepening standoff between the world's two largest economies.
Trump says tariffs pause was 'written from the heart, and I think it was well written' https://t.co/t0NsVzY4NQ
— Axios (@axios) April 10, 2025
Beijing wasted no time in retaliating, imposing an 84% tariff on American goods effective immediately. The tit-for-tat measures underscored the fragility of the trade negotiations, which Trump insisted would eventually lead to a deal.
'A deal's going to be made with China. A deal's going to be made with every one of them,' the president said, though he expressed uncertainty over China's negotiating strategy, claiming the Chinese leadership 'don't quite know how to go about it.'
Despite the market turbulence, Trump dismissed suggestions that he had backtracked on his tough trade stance. 'You have to be flexible,' he told reporters. However, his decision to hold off on further tariff hikes on China suggested a growing recognition of the economic risks posed by the escalating trade war.
The European Union, meanwhile, had already announced retaliatory steps targeting US products, including soybeans, motorcycles, and cosmetics, valued at over 20 billion euros. These countermeasures are expected to take effect next week.
However, the EU notably refrained from responding to the separate tariffs of 20 percent that were implemented on Wednesday.
As the trade landscape continues to shift, markets and governments alike are bracing for further developments, with the US-China economic clash showing no signs of abating.