Trump-China tariff war: What could the US gain and lose?

US President Donald Trump’s abrupt decision to implement a 90-day pause on the tariffs he imposed on dozens of countries has sent battered stock markets surging, even as he ratcheted up his trade war with China.

Trump’s turnaround on Wednesday, which came just 13 hours after the duties had gone into effect, followed the most intense episode of financial market volatility since the COVID-19 pandemic.Stocks soared following Trump’s announcement of a pause on some tariffs. The S&P 500 jumped 9.5 percent on Wednesday, the index’s biggest single-day leap since 2008. Oil prices, which slid in recent days on fears of a global recession, also rallied on the news.

Still, not all of Trump’s tariffs have been lifted. A 10 percent levy on most countries remains in place. Meanwhile, the United States escalated its trade war with China, raising tariffs to a whopping 125 percent – deepening an economic crisis between the world’s two largest economies.

What are Trump’s latest moves?
On Wednesday, Trump announced a 90-day pause on “reciprocal” tariffs for almost 60 countries and the European Union. The tariffs were customised for each country and corresponded to the size of their trade surplus with the US.Imports from those countries will now be subject to a flat tax of 10 percent, which Trump introduced on April 5. China was not included in the pause.

Instead, Trump announced that he would raise levies on Chinese goods to 125 percent, from 104 percent. Trump’s decision came after Beijing announced plans to retaliate with an 84 percent duty on American goods on Wednesday.

World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala has said the tensions “pose a significant risk of a sharp contraction in bilateral trade” between the US and China.

“Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 percent,” she said in a statement on April 9.

What did Trump actually say?
At a White House event celebrating Joey Logano, the NASCAR Cup Series Champion, Trump claimed his method for assigning and adjusting tariffs was based on “more of an instinct than anything else”.