Trump Pauses Global Tariffs, Escalates Trade War With China
Published • 10 April 2025 at 4:48 AM
U.S. Markets Surge as Trump Freezes New Tariffs, Raises China Duties
U.S. President Donald Trump shocked markets by pausing newly imposed tariffs on dozens of countries, sparking a global stock rally even as he intensified the trade war with China. The reversal came just a day after sweeping duties were enacted and followed days of financial turmoil that erased trillions from global markets and drove U.S. bond yields sharply higher. Trump’s decision led the S&P 500 to surge 9.5%, while Japan’s Nikkei jumped 8%. Though markets welcomed the move, analysts warned the relief may be temporary. Trump clarified the pause was a strategic move meant to calm markets and bring trading partners to the negotiating table. Treasury Secretary Scott Bessent echoed this, stating it was part of a broader diplomatic push. Despite the broader pause, Trump increased tariffs on Chinese imports from 104% to 125%, escalating tensions with the U.S.’s second-largest import source. In response, China maintained its vow to "fight to the end," having already slapped 84% tariffs on U.S. imports. Chinese sellers on platforms like Amazon are now considering price hikes or market withdrawal. While the White House froze some tariffs for 90 days, a 10% blanket duty on most U.S. imports and existing duties on autos, steel, and aluminum remain. Canada and Mexico still face fentanyl-related tariffs unless USMCA compliance is met. Goldman Sachs reduced its U.S. recession odds to 45% following the move but warned the remaining tariffs could still slow growth. Trump, insisting on flexibility, emphasized a potential resolution with China but signaled other countries would be prioritized in talks. His surprise strategy has left global markets on edge amid hopes for stability and clarity.
Global Stock Markets Surge as Trump Hits Pause on New Tariff
- Trump Pauses Global Tariffs: U.S. President Donald Trump paused newly imposed tariffs on dozens of countries just one day after enacting them.
- Market Reaction: The surprise move sparked a global rally—S&P 500 surged 9.5%, and Japan’s Nikkei jumped 8%.
- Strategic Pause: Trump claimed the pause was a strategic decision to calm markets and encourage negotiations with trade partners.
- China Tariffs Intensify: Despite the broader freeze, tariffs on Chinese imports were hiked from 104% to 125%, intensifying trade tensions.
- China’s Response: China reiterated its commitment to retaliate, having already imposed 84% tariffs on U.S. goods. Chinese sellers on Amazon consider price hikes or exit.
- Remaining Tariffs: A 10% blanket duty on most U.S. imports remains, along with existing auto, steel, and aluminum tariffs.
- Canada & Mexico Exemptions: Tariffs tied to fentanyl enforcement still apply unless USMCA rules are met.
- Recession Risk: Goldman Sachs lowered U.S. recession odds to 45% but warned growth may still be affected by remaining tariffs.
- Diplomatic Efforts: Treasury Secretary Scott Bessent called the pause a diplomatic tactic; Trump hinted at flexibility but prioritized talks with nations other than China.
- Global Uncertainty: The unexpected reversal has left markets uncertain, with investors watching for long-term clarity and policy consistency.
