President Donald Trump announces a dramatic 90-day pause on some of his recently imposed tariffs, a move that sends U.S. stock markets soaring while simultaneously intensifying tensions with China by raising tariffs on Chinese imports to a staggering 125%. The announcement, made via a post on Truth Social at 10:42 AM PDT on April 9, 2025, is effective immediately and comes after a tumultuous week of market volatility driven by Trump’s aggressive trade policies. White House Press Secretary Karoline Leavitt, Treasury Secretary Scott Bessent, and economic experts weigh in on the strategy, with Wall Street reacting positively as the Dow Jones Industrial Average surges 2,541.92 points, a 6.73% increase to 40,180.98, the S&P 500 climbs 392.26 points, or 7.87%, to 5,375.03, and the Nasdaq Composite jumps 1,529.03 points, a 10% rise to 16,794.65.
The 90-day pause applies to most countries except China, lowering reciprocal tariffs to a universal 10% during this period. Leavitt explains that the decision stems from over 75 countries reaching out to negotiate trade deals with the U.S., including the Departments of Commerce, Treasury, and the USTR, following Trump’s initial tariff announcements last week. “These countries have not retaliated against the United States, and President Trump is rewarding that cooperation,” Leavitt tells reporters, adding a pointed jab at journalists: “Clearly, some of you missed the Art of the Deal.” She emphasizes that the pause is part of ongoing negotiations, with the tariff level brought down to encourage dialogue. However, China faces a different fate, as Trump cites its “lack of respect for the world’s markets” and its retaliatory tariffs as justification for the 125% increase. On April 8, China announced an 84% tariff on all U.S. imports, up from a previously planned 34%, in response to Trump’s earlier 104% levy on Chinese goods, which took effect at midnight on April 8.
Treasury Secretary Scott Bessent reinforces the administration’s stance, stating that the tariff escalation on China is a direct response to its unwillingness to negotiate. “China chose to retaliate by raising tariffs on U.S. goods, and that was a mistake,” Bessent says, adding that the 90-day pause for other nations was “the plan all along.” He warns that China is underestimating Trump’s resolve, echoing Leavitt’s sentiment that this is “not a game China wants to play.” Dr. Aamir Khan, an economist with the University of Arizona and Ardent Advisory Group, agrees, noting that Trump’s strategy has been deliberate from the start. “This was all part of the White House plan, beginning the day the tariffs were announced,” Khan says. He highlights Trump’s earlier comment to investors on April 9, “It’s a good time to buy,” as evidence of the administration’s confidence. Khan adds, “A very strong message was sent to China, and so far, President Trump’s strategy is working.”
The market’s reaction is immediate and euphoric. The Nasdaq’s 10% surge marks its best day since 2008, driven by gains in technology stocks like Tesla, Nvidia, and Apple, each up over 10%, and the VanEck Semiconductor ETF, which rises more than 14%. The S&P 500’s 7.87% increase is on track to be its largest single-day gain in five years, while the Dow’s 2,541.92-point jump reflects a broader relief among investors. The rally follows a brutal week of market turmoil, with the S&P 500 losing $5.8 trillion in value since Trump’s initial tariff announcement on April 2—a four-day loss unprecedented since the benchmark’s creation in the 1950s. Just a day earlier, on April 8, the S&P 500 closed below 5,000 for the first time in nearly a year, flirting with bear market territory after dropping 18.9% from its February peak, while the Nasdaq, already in a bear market, was down 24.3% from its December high.
The tariff saga began on April 2, when Trump unveiled a sweeping plan to impose country-specific tariffs, including a 104% duty on Chinese imports, as part of his “reciprocal trade” agenda aimed at addressing trade imbalances, currency manipulation, and non-monetary barriers. The move triggered immediate global backlash, with China announcing a 34% retaliatory tariff on U.S. goods, later escalated to 84% on April 8. The European Union also approved trade retaliation against the U.S., while other nations, fearing economic fallout, began negotiations with U.S. officials. Markets plummeted amid fears of stagflation—a scenario where economic growth stalls while inflation surges—with the S&P 500 on the verge of a bear market by April 7. Volatility soared, with the S&P 500 swinging 6% or more peak-to-trough for three straight sessions, a phenomenon last seen during the 1987 market crash, the 2008 financial crisis, and the 2020 pandemic lows.
A false report on April 7, stemming from a misreading of an interview with Kevin Hassett, director of the National Economic Council, briefly sent stocks surging on hopes of a 90-day tariff pause. The White House quickly labeled the report “fake news,” causing markets to resume their downward spiral. On April 8, U.S. stocks opened with a rally, with the Dow gaining over 1,300 points on trade deal hopes, only to erase those gains and close down 320 points after the White House confirmed the 104% tariff on China would proceed. The Dow’s intraday swing of 2,595 points on April 7 marked its largest ever, while the S&P 500’s 8.5% high/low spread was a rare event, having occurred only 20 times since 1962.
The 90-day pause offers a reprieve for most trading partners, but the 125% tariff on China escalates an already heated trade war. China’s Finance Minister has vowed to “fight back,” with analysts like Peter Andersen of Andersen Capital Management calling it a “game of chicken” between the two economic superpowers. The tariff increase is expected to hit U.S. consumers hard, with companies like Apple, which manufactures most of its iPhones in China, seeing shares drop 5% on April 8. One analyst predicts that an iPhone produced in the U.S.—as suggested by Leavitt—could cost $3,500. Meanwhile, the broader economic impact remains uncertain. Independent economist Peter Boockvar notes a 51-basis-point swing in the 10-year Treasury yield, which jumps to 4.38% on April 9, the largest three-day increase since December 2001. Morgan Stanley analysts have lowered expectations for large and mid-cap bank earnings, citing tariff-related headwinds, while some Wall Street traders warn of a looming recession.
Breaking news updates indicate mixed global reactions. Posts on X reflect a polarized sentiment, with some users accusing Trump of manipulating the stock market, while others, including the White House’s official account, celebrate the tariff pause as a strategic win. The White House insists the market surge validates Trump’s approach, with Leavitt mocking reporters’ fears as a misunderstanding of his negotiation tactics. However, critics argue that the tariff escalation with China risks long-term economic damage, pointing to the $5.8 trillion market loss as evidence of the policy’s recklessness. The EU, which approved retaliatory measures on April 8, is now reportedly reconsidering its stance, with some in Brussels wishing they had known about the pause for non-retaliating partners.
Historically, Trump’s tariff policies echo his first term, where he imposed tariffs on Chinese goods in 2018, sparking a trade war that led to a phase-one deal in 2020. His current strategy builds on that playbook but with heightened intensity, reflecting his 2024 campaign promise to prioritize American manufacturing and reduce reliance on foreign goods, particularly from China. The reciprocal tariff plan, first announced on April 2, 2025, aims to force trading partners to the negotiating table, a tactic Trump has long championed as a means of addressing what he calls “unfair trade practices.” However, the rapid escalation with China—now at 125%—marks a new chapter in U.S.-China relations, with global markets caught in the crossfire.
As the 90-day pause unfolds, the world watches to see if Trump’s gamble will pay off. For now, Wall Street breathes a sigh of relief, but the specter of a prolonged trade war with China looms large, threatening to reshape the global economic landscape.
Sources:
- Video: BREAKING: Trump orders 90-day pause on some tariffs, raises China’s to 125%
- Video: Stocks soar after Trump pauses tariffs for 90 days
- Video: Karoline Leavitt Mocks Reporters’ Fears Over Tariff Battle: ‘Clearly Missed The Art Of The Deal’
- Web sources: abcnews.go.com, reuters.com, finance.yahoo.com, theguardian.com, cnbc.com, msnbc.com, cbc.ca, npr.org, nytimes.com, apnews.com, aljazeera.com, ft.com, usatoday.com, cnn.com, bloomberg.com
- Posts on X reflecting user sentiment and breaking updates
