President Donald Trump announced Wednesday a 90-day pause on his recently imposed tariffs on most nations on Wednesday, April 9, 2025, while simultaneously increasing the tariff rate on imports from China to 125%. This move triggered a significant rally in U.S. markets.
“Scott Bessent and I sat with the President while he wrote one of the most extraordinary Truth posts of his Presidency. The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction,” said Secretary of Commerce Howard Lutnick.
Trump released a statement on Truth Social saying, “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 realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”
The announcement led to a dramatic turnaround on Wall Street. The S&P 500 jumped 5.7%, recovering from earlier losses. The Dow Jones Industrial Average soared by 2,000 points (5%), and the Nasdaq composite climbed by 6.8%.
READ: Kevin O’Leary Calls For 400% Tariffs On China, Cites Unfair Trade Practices
This market surge reflects investors’ relief at the prospect of reduced global trade tensions, though concerns remain focused on the increased US-China trade tensions.
Trump’s Initial Tariffs: President Trump’s “reciprocal” trade plan, including new import taxes, had taken effect earlier in the week, affecting nearly all of America’s trading partners.
EU Retaliation: In response to Trump’s tariffs on imported steel and aluminum, European Union member states had voted to approve retaliatory tariffs of their own, with implementation scheduled in phases.
Other Countries Respond: China also announced increased tariffs on American goods, raising them to 84%. Canada also retaliated with a 25% tariff on auto imports not compliant with the USMCA trade agreement.
Earlier Market Decline: The announcement of the initial tariffs had caused a significant market downturn, with the Dow Jones Industrial Average experiencing substantial losses over the previous two days.
READ: Asian And European Stocks Decline As US Tariffs Take Effect; China Retaliates
President Trump’s actions seem to shift the primary focus of his trade policy to China. U.S. Trade Representative Jamieson Greer’s testimony before the Senate Finance Committee revealed that around “50” countries had sought talks with the U.S. to seek exemptions from the tariffs.
It remains to be seen how the intensified focus on China and the increase in tariffs will affect trade relations and the global economy.
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