US pauses higher tariffs for most countries but hits China harder

In a dramatic change of policy, just hours after levies against roughly 60 of America's trading partners kicked in, Trump said he was authorising a universal "lowered reciprocal tariff of 10%" as negotiations continued. The BBC reported.

At the same time he increased tariffs on goods from China to 125%, accusing Beijing of a "lack of respect" after it retaliated by saying it would impose tariffs of 84% on US imports.

This comes a week after Trump announced import taxes on all goods entering the US, in the biggest upheaval of international trade in decades.

His plan set a baseline tariff of 10% on all imports - which remains in place - but also higher rates on partners the White House described as the "worst offenders" for what the president considers to be unfair trade practices.

This included the 27-member European Union, Vietnam, South Africa and many more - all of which were due to be on the receiving end of US tariffs ranging from 11% to more than 100%.

Major market turmoil followed Trump's announcement last week, with sell-offs sparking trillions in losses across the world, many Americans fearing price rises and some analysts predicting increased odds of recession.

On Wednesday, before Trump said he would suspend the higher tariffs on goods from countries other than China, the US government saw interest rates on its debt spike to 4.5% - the highest level since February.

Hours later, when the change was announced, US shares rocketed with the S&P 500 soaring 7% in afternoon trading. It later closed the day's trading up 9.5%, while the Dow Jones surged by 7.8%.

Announcing the latest iteration of his plan on Truth Social, Trump said he was authorising a 90-day pause on tariffs for the countries that had not retaliated against his levies.

The additional tariff on Beijing, he said, would be effective immediately. "At some point, hopefully in the near future, China will realise that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable," he wrote.