United States President Donald Trump on Wednesday reduced the tariffs rate on imports from most countries to 10% for 90 days to provide time for trade negotiations.

The pause came hours after the so-called reciprocal tariffs imposed by the US on several countries took effect amid concerns of a broader trade war that could disrupt the global economy and trigger recession.

However, the US president said that he was increasing the tariffs imposed on imports from China to 125% with immediate effect, citing the “lack of respect” Beijing had shown to the global markets.

“At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable,” Trump said on social media.

Trump claimed that 75 countries had sought trade negotiations with Washington and had not retaliated.

Washington announced “reciprocal” tariffs on dozens of countries, including a 26% “discounted” levy on India, on April 2.

Trump had repeatedly said he intended to impose a reciprocal tax on India, among others, citing high tariffs the countries impose on foreign goods. He has already imposed tariffs on a range of products from Canada, Mexico and China.

The US president had planned 34% tariffs on Chinese products in addition to the 20% rate imposed in March. However, he vowed to add another 50% levy after China announced its own 34% counter tariffs on American goods. This had brought the additional tariff rate on Chinese goods to 104%.

Retaliating to this, Beijing on Wednesday increased its tariffs on American goods to 84%. Trump responded by increasing the tariffs imposed on China by 21% on Wednesday.

Asian stock indices responded positively to Trump’s Wednesday announcement. While Japan’s Nikkei index jumped 8% on Thursday morning, South Korea’s Kospi surged 4.8%.

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On April 3, New York-based financial services firm JPMorgan revised its odds for a global recession by the end of 2025 from 40% to 60%. Financial services firm Goldman Sachs has raised the probability of a recession in the US to 45% in the next 12 months from the current 35%.

Talks on to finalise trade pact by autumn: India

The Indian government has not commented on the pause in tariffs so far but had said on Wednesday that it was in talks with Washington to finalise a bilateral trade agreement between September and November.

“I don’t think it’s possible to speak about what would be the impact, because we don’t know,” External Affairs Minister S Jaishankar said at the News18 Rising Bharat Summit.

Jaishankar added: “We decided that we will engage the Trump administration early on this set of issues and we were very open with them, very constructive with them as they were with us, and what we agreed to do was to try to negotiate a bilateral trade agreement by fall of this year.”

The external affairs minister was reiterating the Indian government’s position that it had sought time until September to address the matter.

When the tariffs plan was unveiled, New Delhi had said that it was “carefully examining the implications of the various measures”.

The tariff plan triggered a global sell-off in the stock markets on Monday. The Indian stock markets witnessed one of their worst falls in 10 months. With this, investor wealth of about 13.5 lakh crore was wiped out.

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