UPDATED: Trump pauses tariffs for 90 days, raises China's to 125%, stock markets surge

In a surprise move, President Donald Trump announced an immediate tariff hike on China to 125%, citing what he calls its ongoing disrespect of international markets. 

Trump simultaneously granted a 90-day pause on tariffs for more than 75 other countries, offering them a temporary reduction to 10%. 

Trump delivered the news via Truth Social, urging nations to collaborate rather than retaliate. 

The news sent stock markets soaring.

The "fentanyl tariffs" on Canada and Mexico remain unchanged.

Under the USMCA, trading among the three countries is tariff-free, while non-USMCA shipments are subject to a 25% tariff except for energy and potash, which face a 10% tariff.

A 10% global baseline tariff did not take effect for Canada or Mexico, and neither country will be subject to that rate going forward.

The decision came on the heels of a dramatic sell-off in 10-year US Treasury bonds, which saw yields soar above 4.5% before easing slightly. 

Investors usually turn to these bonds as a safe haven, but the spike in yields shows investors losing confidence in the US government’s ability to manage debt.

Experts warn that the US may be drifting into a financial crisis, as higher Treasury yields could drive up borrowing costs across the economy. 

Higher interest rates could force major tax hikes or spending cuts, putting more strain on people and businesses. 

Analysts say the bond market’s reaction suggests some investors are uneasy about the Treasury Department’s ability to repay its obligations, signalling lasting economic turbulence.

China fired back swiftly at Trump’s move, slapping an 84% duty on US goods and vowing not to back down. 

"No other President would have done what I did," said Trump.

"Somebody had to do it. It had to stop because it's not sustainable. Last year, China made $1 trillion off trade with the United States. Now I've reversed it."

Meanwhile, Canada enforced its own 25% tariff on US vehicles, matching the US tariffs on vehicles and parts. 

The European Union also responded with 25% tariffs on selected US goods, sending markets in London, Paris, and Frankfurt down by about three percent overnight.

Several US companies expressed worries about tougher economic conditions. 

Retail giant Walmart cited tariff risks when it lowered its expectations for first-quarter profit growth. 

Delta Airlines pulled its annual earnings forecast, citing “broad economic uncertainty around global trade.” 

“Well I though that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy. A little bit afraid," said Trump.

Markets soared on Wednesday after President Donald Trump announced a pause in reciprocal tariffs, igniting a surge in trading.

The S&P/TSX Composite Index jumped 1,220.13. or 5.42%, to 23,727.03.

The Dow Jones Industrial Average advanced 2,962.86 points, or 7.87%, to a record 40,608.45.

The Nasdaq Composite jumped 12.16% to 17,124.97, marking its largest one-day gain since January 2001.

The S&P 500 skyrocketed 9.52% to 5,456.90, achieving its third biggest jump since the Second World War.

Volume reached 30 billion shares, according to 18-year records.