President Donald Trump announced a 90-day pause on tariffs, excluding China, which drove the S&P 500 to one of its largest single-day increases since World War II. The Dow Jones Industrial Average soared nearly 3,000 points, and the Nasdaq surged over 8%. Some international leaders praised the tariff pause, with Canadian Prime Minister Mark Carney calling it a “welcome reprieve.” However, China retaliated by increasing tariffs on US goods from 34% to 84%, causing significant drops in major European indices.
The EU also announced countermeasures targeting $21 billion worth of US products. Trump admitted some people were “a little bit afraid” of his tariffs but suggested the pause and increase on China were potentially temporary. Treasury Secretary Scott Bessent noted that the pause had always been part of Trump’s strategy.
Trump’s tariff pause and stock surge
Hours before announcing the tariff pause, Trump posted on Truth Social that it was “a great time to buy,” resulting in substantial market gains. Ethics experts raised concerns about this post potentially violating securities law, but a White House spokesman defended it as the President’s reassurance to the markets.
Trump also signed several directives, including one requiring agencies to assign one-year expiration dates to current energy regulations, which will expire by September 30, 2026, unless extended. Another directive targeted former government officials critical of him, including the revocation of security clearances. The temporary tariff pause has significantly boosted the US stock market, but broader international reactions remain mixed.
The overall market optimism might be temporary, depending on ongoing trade negotiations and how other nations retaliate in this escalating trade war.
Image Credits: Photo by Ivan Karpov on Unsplash
