US President Donald Trump this morning announced he is raising tariffs on goods from China to 125%.

In a post on his favoured platform, Truth Social he said: “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, 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.”

Finance Minister Nicola Willis will be speaking live to Newstalk ZB’s Mike Hosking at 7.37am as the world reacts to Trump’s latest move. Listen here:

US stocks immediately rocketed higher after Trump’s announcement.

The president’s post on Truth Social lifted the three major indexes towards one of their best days on record.

By mid-afternoon, the US market had gained about US$4.8 trillion in market value.

“More than 75 Countries” Trump wrote, “have called to negotiate a solution … and have not, at my strong suggestion, retaliated in any way, shape, or form.”

Because of that, he wrote, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”

Magic roundabout

A New Zealand money market expert is describing the latest about-face on US tariffs as a “magic roundabout” with US trade policy moving like a yo-yo and uncertainty in the financial sector sitting at “defcon 5”.

JMI Wealth’s Andrew Kelleher told Newstalk ZB’s Mike Hosking the world was living in an alternative universe after today’s tariff announcement pause.

“Crazy stuff continues. The US sharemarket has absolutely exploded to the upside. A 10% move on the Nasdac, 8% moves on the S&P 500, Dow Jones, 6-7. Who knows where that will close?” Kelleher said.

Meanwhile the trade war with China was really “ramping up” and all the “crazily calculated tariffs” were now off the table with a baseline tariff for everyone for the next 90 days.

However, there was confusion in the European market whether it was included in the equation given it too was moving to retaliatory action.

“There are just no facts, there’s a lack of clarity and the usual colourful rhetoric from the White House media spokesperson”, Kelleher said.

He said facts would be great but they seem to be hard to come by.

Kelleher said it seemed the policy around trade and tariffs was being made “on the hoof” and all power was in Trump’s hands.

The Kiwi dollar had jumped on the back of the pause announcement, but uncertainty levels were at “defcon 5” and were driving markets higher.

“But who knows what’s going to be announced next? We’ve just got to sit and wait for this day-to-day yo-yo.

“The magic roundabout I’m calling it.”

Earlier, US Treasury Secretary Scott Bessent said Donald Trump’s “strategy” had played out as planned after the US president paused tariffs for most countries while hitting China harder.

“This was his strategy all along, and you might even say that he goaded China into a bad position,” Bessent told reporters at the White House after Trump’s abrupt backtrack.

He said China was the “most imbalanced economy” in modern history, posing trade problems for the United States and other countries.

“China is the most imbalanced economy in the history of the modern world and they are the biggest source of the US trade problems,” Bessent told reporters, saying US tariffs on Chinese imports have caused its goods to flow into Europe. He said China’s economy poses problems for the rest of the world.

JPMorgan chief Jamie Dimon had said the economy was likely headed for a recession.

More to come.

– Agencies