President Donald Trump announced a 90-day pause on tariffs for over 75 countries, causing stocks to surge immediately, offering a window for renegotiation. However, the administration also raised tariffs on Chinese imports to 125%, escalating the ongoing trade conflict and sending ripples through international markets.
Following President Trump’s announcement of comprehensive tariffs on April 9, 2025, global financial markets reacted with significant volatility.
Here’s the full statement by President Trump on his Truth Social platform, in which he announced a 90-day pause on tariffs except for China:
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!
President Donald Trump via Truth Social
Market reactions
In the United States, the Dow Jones Industrial Average rose by 167.93 points (0.45%) to close at 37,813.52, while the S&P 500 increased by 33.11 points (0.67%) to finish at 5,015.97. The Nasdaq Composite gained 217.21 points (1.43%), ending at 15,486.85. Despite these gains, the S&P 500 experienced a cumulative loss of $5.8 trillion in market value since the tariff announcement, marking the most substantial four-day decline since the index’s inception in the 1950s.
Internationally, markets were adversely affected; the Australian S&P/ASX 200 index declined by 1.8%, and Asian markets, including Japan’s Nikkei 225, saw significant drops, triggering automatic trading halts. The heightened market volatility was further exacerbated by China’s imposition of 84% tariffs on U.S. goods in retaliation, prompting sharp declines in U.S. futures and European stocks.
Overview of the new tariff policy
The tariff announcement marks a shift in the Trump administration’s trade policy. Initially, the White House introduced a broad 10% tariff on imports from nearly every country, citing trade imbalances and the desire to strengthen domestic manufacturing.
This week’s decision scales back that approach—at least temporarily—for countries that have expressed willingness to negotiate new trade terms.
Why the pause was issued
According to administration officials, over 75 countries contacted the U.S. with interest in developing updated trade agreements. The 90-day delay is meant to give those nations time to negotiate terms before any additional tariffs are applied.
“This move is about giving our partners time to come to the table in good faith,” said Treasury Secretary Scott Bessent during a press briefing. “It’s not about punishment—it’s about cooperation.”
Countries included in the pause have not yet been publicly named, but the administration says they will be announced once negotiations begin.
U.S.-China trade tensions rise
While the administration softened its stance toward many nations, tariffs on Chinese goods were raised significantly—from previous combined rates of around 75% to 125%. The increase includes new retaliatory tariffs aimed specifically at what officials called “unfair trade practices” by Beijing.
China responded by imposing an 84% tariff on U.S. imports and filing a formal complaint with the World Trade Organization.
Chinese officials called the move “unilateral and escalatory,” warning that the U.S. actions risk further destabilizing global trade.
Economic and market response
Markets responded positively to the tariff pause, with the S&P 500 rising 5.6% and the Nasdaq jumping more than 8% by day’s end. Major retailers and tech companies, many of which rely on global supply chains, saw gains after weeks of uncertainty.
However, several economists cautioned that the economic outlook remains uncertain. Lawrence Summers, former U.S. Treasury Secretary, noted that while the pause may provide short-term relief, escalating trade tensions with China could still carry serious long-term risks, including slowed growth and job losses.
Financial firms such as Goldman Sachs and JPMorgan Chase raised their estimates for the likelihood of a U.S. recession to 45% and 60%, respectively.
International reaction
Some U.S. allies welcomed the 90-day window for trade discussions and indicated interest in pursuing permanent exemptions. European Union officials said they are “cautiously optimistic” that renewed talks could lead to more stable trading conditions.
At the same time, concerns are mounting over the sharp increase in tariffs on Chinese goods, with global trade experts warning of potential ripple effects if negotiations between the U.S. and China break down further.
As the 90-day clock begins, global leaders and financial markets will be watching closely to see whether the tariff pause leads to meaningful diplomatic progress—or simply delays further disruptions.
