President Donald Trump has announced a temporary reversal of his global tariff policy, suspending new tariffs for most countries for 90 days while simultaneously increasing duties on Chinese imports to 125%.
The decision, unveiled on 9 April, came amid mounting financial market turmoil and widespread criticism of the administration’s abrupt trade measures.
Markets responded sharply to the announcement. The S&P 500 surged 9.5%, marking its largest single-day gain since the 2008 financial crisis, while the Nasdaq Composite jumped 12.2%, its strongest performance since the dot-com era. The Dow Jones Industrial Average also posted significant gains, rising over 8%.
The White House stated that the 90-day suspension aims to allow further negotiations with countries impacted by the recently imposed blanket 10% tariffs. However, this pause explicitly excludes China. Tariffs on Chinese goods will rise from 104%—imposed just one day earlier—to 125%.
In remarks outside the White House, Trump explained his decision as a response to widespread anxiety. “People were getting a little bit yippy,” he said, noting that his administration observed unease in markets and among business leaders. He insisted that the move did not signal a retreat but rather a strategic adjustment to maintain leverage during ongoing trade discussions.
Trump added that talks with China were ongoing, though he admitted Beijing “just doesn’t know how quite to go about” making a deal. “It’s going to work out,” he said, characterising the tariff shift as part of a broader “transition.”
The move was widely interpreted as a political and economic manoeuvre following warnings from JPMorgan Chase CEO Jamie Dimon of a potential U.S. recession, and sharp sell-offs in equities earlier in the week. Since 2 April, when broad tariffs were first implemented, U.S. stock markets had lost more than 12% in value.
Despite the stock market rally, fixed-income markets remained unsettled. Yields on 10-year Treasury notes, which had climbed to a seven-week high, remained elevated. A sell-off in bonds earlier in the week had prompted questions about the global perception of U.S. financial stability. “The market has lost faith in U.S. assets,” Deutsche Bank analysts observed in a note prior to the tariff suspension.
Economic analysts and trade experts offered mixed responses. Wendy Cutler, Vice President at the Asia Society Policy Institute and a former acting deputy U.S. trade representative, described the 90-day pause as “a welcome turn of events,” providing breathing room for negotiation. However, she noted that the decision to raise tariffs on China was consistent with Washington’s concerns over trade imbalances and alleged unfair practices by Beijing.
By contrast, Melina St. Louis, Director at the watchdog group Public Citizen, accused Trump of prioritising Wall Street over ordinary Americans. “All he has shown is that he’ll cave to Wall Street’s handwringing and prioritise his own power over real people’s plight,” she said.
Within the U.S. Congress, reactions were sharply divided along partisan lines. Senator Ron Wyden, a Democrat and chair of the Senate Finance Committee, condemned the measure as another tax on consumers, describing it as “prolonging the chaos.” He called for legislation to overturn Trump’s global tariffs entirely. Meanwhile, Senate Democrats, including Minority Leader Chuck Schumer, characterised the tariff policy as “chaotic,” with Schumer accusing the president of treating the economy like “a game.”
Republican allies of Trump defended the move as part of a broader negotiation strategy, particularly with China. White House officials echoed this view, referencing the administration’s emphasis on “reciprocal” tariffs as a bargaining tool.
In Britain, a Downing Street spokesperson said the UK would continue negotiations “coolly and calmly,” reiterating its opposition to all tariffs. The spokesperson emphasised the importance of free trade to jobs and livelihoods across the UK.
From an investor standpoint, the tariff pause provided short-term relief, though concerns over long-term policy direction persist. Gina Bolvin, President of Bolvin Wealth Management Group, called the announcement “a pivotal moment,” but noted ongoing volatility ahead. “Uncertainty looms over what happens after the 90-day period,” she said.
Goldman Sachs responded by retracting its previous recession forecast and reinstating a baseline prediction of economic growth in 2025. However, some companies, such as Delta Airlines, have already revised their outlooks citing trade uncertainty.
Chip stocks led Wednesday’s rally, with the PHLX semiconductor index rising 17%—its biggest gain since 2000. Nvidia and Broadcom recovered strongly, alongside gains in tech giants such as Apple and Tesla. Airlines also posted gains exceeding 20%.
Despite the rebound, trade groups and industry leaders warned that the underlying uncertainty remains. Jake Colvin, President of the National Foreign Trade Council, cautioned that “the pause is a step in the right direction” but that the tariff regime remained fundamentally unpredictable.
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