In a dramatic twist during an already volatile trade showdown, US President Donald Trump heaped praise on Chinese President Xi Jinping, calling him “one of the smartest people in the world” even as both Washington and Beijing lobbed escalating economic threats at each other. The tensions flared further when Trump executed a stunning volte-face – suspending tariffs on over 75 countries in a conciliatory gesture, while simultaneously hammering Beijing with a punishing escalation, jacking up tariffs on Chinese imports to a staggering 125 per cent.
“Xi is a smart guy, and we’ll end up making a very good deal,” Trump told reporters, exuding optimism even as he signed off on the most punishing trade measures against China to date.
“Xi is a man who knows exactly what has to be done. He loves his country.” The president’s tone was almost admiring, adding that he would be open to speaking with Xi directly. “We will get a phone call at some point and then it’s off to the races.”
The rare praise came on the heels of a stunning policy reversal. Just a day after imposing sweeping new tariffs, Trump announced a 90-day pause on duties for more than 75 countries, easing pressure on many US allies while simultaneously hitting China even harder – raising tariffs on Chinese imports to a staggering 125 percent.
The move caught markets by surprise and sent stock indexes surging after days of sharp declines.
While the president cast the tariff pause as a generous olive branch to cooperative nations, the underlying message was unmistakable: reward for compliance, punishment for defiance.
“I did a 90-day pause for the people that didn’t retaliate,” Trump explained. “Because I told them: if you retaliate, we’re going to double it – and that’s what I did with China.” He described the shift as necessary, saying, “People were getting yippy.”
At the heart of the strategy is a clear attempt to isolate China economically while rallying other nations to Washington’s side. “Do not retaliate, and you will be rewarded,” the White House posted bluntly on social media platform X.
Treasury Secretary Scott Bessent echoed the sentiment, describing the tariff pause as a “calculated play” aimed at encouraging global cooperation and exposing China’s “bad actor” behaviour.
“We are going to go down to a 10 percent baseline tariff for them,” Bessent said, referring to countries that didn’t strike back, “and China will be raised to 125 percent due to their insistence on escalation.”
He revealed that Trump had discussed the strategy with him days earlier. “You might even say that he goaded China into a bad position. They responded. They’ve shown themselves to the world to be the bad actors.”
Beijing, however, was quick and fierce in its retaliation. In response to the US escalation, China announced it would impose tariffs of up to 84 percent on American goods – a dramatic jump from the earlier 34 percent.
It also filed a fresh complaint with the World Trade Organisation, accusing the US of undermining the multilateral trading system and violating China’s rights. Additionally, 12 US companies were added to Beijing’s export control list, and six more were placed on its unreliable entities list.
China’s Finance Ministry issued a scathing statement, calling Washington’s actions “a mistake on top of a mistake” and warning that the tariffs posed a grave threat to global trade stability.
The ministry said Beijing would “fight to the end” and dismissed the idea of immediate talks with the US, unlike other nations that have already begun negotiations. A government white paper released the same day called the trade gap between the world’s two largest economies “inevitable” and insisted the overall exchange was “roughly in balance.”
Despite the heated rhetoric and retaliatory blows, Trump continued to strike a tone of confidence. “I think investing in the United States of America will be the greatest investment,” he said. He boasted of America’s military might – “we have weapons that nobody even knows” – before circling back once again to Xi, the man he insists will eventually want to make a deal.
“I think he’s going to want to get to a deal,” Trump said, brushing off the latest round of Chinese countermeasures. His top economic aides say the tariff drama is all part of a broader vision.
“Every country in the world wants to come and negotiate,” Bessent claimed. “We are willing to hear you. We are willing to cooperate with our allies and with our trading partners who did not retaliate. It wasn’t a hard message – don’t retaliate, things will turn out well.”
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