Trump is waiting for China’s reaction before implementing the 104% tariffs

On Tuesday, U.S. President Donald Trump announced that he is awaiting a response from China before implementing tariffs exceeding 100%, suggesting a potential openness to last-minute negotiations with the second-largest economy in the world.

Following several tumultuous days in the markets due to Trump’s extensive tariffs, which have sparked recession fears and disrupted a long-standing global trading framework, global markets showed signs of stabilization. U.S. stock indexes experienced a significant rebound after a severe selloff that has erased trillions of dollars in value since the previous week.

Trump has already enacted a 10% tariff on nearly all imports into the largest consumer market globally, with additional targeted tariffs of up to 50% on various trading partners set to take effect on Wednesday. In response, China has rejected what it describes as “blackmail” and has pledged to “fight to the end,” following Trump’s threat to escalate tariffs to 104% in retaliation for China’s decision to impose “reciprocal” duties announced last week.

Trump suggested that a resolution could be on the horizon, stating, “China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen!” via social media.

In an effort to avert the tariffs, numerous countries are proposing concessions. The Trump administration has initiated discussions with several nations, including Japan and South Korea. Meanwhile, China is preparing for a prolonged economic struggle, with manufacturers of various goods, from tableware to flooring, expressing concerns about profit margins and hastily planning new overseas production facilities. Citing increasing external risks, Citi has revised its 2025 GDP growth forecast for China down to 4.2% from 4.7%.

Several companies are warning of impending price increases. Chipmaker Micron has informed its customers of a tariff-related surcharge starting Wednesday, while U.S. clothing retailers are postponing orders and pausing hiring. According to an industry group, running shoes produced in Vietnam that currently sell for $155 will rise to $220 once Trump’s 46% tariff on that country is implemented.

Consumers are taking the opportunity to stock up on essentials. “I’m purchasing double of everything—beans, canned goods, flour, you name it,” stated Thomas Jennings, 53, as he navigated the aisles of a Walmart in New Jersey.

In the midst of tensions between the world’s two largest economies, China’s Foreign Ministry labeled comments made by Vice President JD Vance during a recent Fox News interview as “ignorant and impolite.”

While defending the tariffs imposed by Trump, Vance criticized the U.S. economic model for its detrimental effects on American workers, stating, “We borrow money from Chinese peasants to buy the products those Chinese peasants create.”

Vietnam has requested a 45-day extension, while Indonesia has announced concessions for U.S. imports, including tax reductions on electronics and steel.

On Tuesday, stock markets regained stability following a tumultuous period for investors, which led some business leaders, including those aligned with Trump, to encourage the president to reconsider his approach. European shares rebounded from 14-month lows after four consecutive days of significant declines, and global oil prices stabilized after reaching four-year lows. Wall Street’s primary indexes recovered from a substantial selloff, driven by technology stocks.

EUROPE CONSIDERS RETALIATORY MEASURES

The European Commission is contemplating imposing counter-tariffs of 25% on various U.S. products, including soybeans, nuts, and sausages, although items like bourbon whiskey were excluded from consideration. Officials indicated their willingness to engage in negotiations.

The 27-member bloc is currently grappling with existing tariffs on automobiles and metals, and is set to encounter a 20% tariff on additional products this Wednesday. Trump has also indicated the possibility of imposing tariffs on alcoholic beverages from the EU.

In a recent meeting, European pharmaceutical companies expressed their concerns to von der Leyen, cautioning that Trump’s tariffs could accelerate the industry’s migration from Europe to the United States.