Trump Pauses Tariffs: U.S. Exchanges Surge in Relief Rally
Washington, D.C. – April 9, 2025, 11:37 AM PDT
In a dramatic pivot that sent shockwaves through global markets, President Donald Trump announced a 90-day pause on his administration’s sweeping “reciprocal” tariffs on most countries, excluding China, late Tuesday evening. The unexpected move, dubbed a “customs break” by analysts, triggered a robust rally on U.S. stock exchanges Wednesday morning, with the Dow Jones Industrial Average soaring over 6% and the S&P 500 jumping 7% within hours of the announcement. The decision marks a temporary reprieve from a trade policy that had threatened to upend global commerce and plunge the U.S. economy into uncertainty.
The tariff pause, effective immediately as of April 9, 2025, halts the implementation of individualized rates ranging from 11% to 50% that were set to hit 86 countries at midnight. These measures, unveiled just a week ago on April 2—coined “Liberation Day” by Trump—had aimed to counter trade imbalances by imposing a baseline 10% levy on all imports, with steeper tariffs on nations like Vietnam (46%) and the European Union (20%). However, China remains an outlier, with tariffs on its goods escalating from 54% to a staggering 125% amid an intensifying U.S.-China trade war. Beijing swiftly retaliated Wednesday, vowing “resolute countermeasures” and slapping an 84% duty on U.S. imports effective April 10.
The White House framed the pause as a strategic recalibration, with Trump stating in a Truth Social post at 10:15 PM PDT Tuesday, “We’re giving our friends 90 days to negotiate fair deals. China’s playing tough—they panicked, and they’ll pay. America First, always.” Insiders suggest the decision followed intense pressure from domestic business leaders and international allies, coupled with a market bloodbath that saw the S&P 500 shed $4 trillion in value since the tariff rollout. Posts on X echoed this sentiment, with users noting Trump “half-blinked” under economic strain, rewarding non-retaliating nations while isolating China further.
Wall Street’s response was immediate and euphoric. By 11:00 AM PDT, the Dow was up over 1,500 points, its largest single-day gain since November 2024, while the Nasdaq climbed 5.8%, buoyed by tech giants like Apple and Nvidia rebounding from tariff-induced losses. “The market was praying for a climbdown, and it got one,” said Ayako Yoshioka, senior strategist at Wealth Enhancement Group. “This pause buys time, but the China standoff keeps the powder keg lit.” Gold prices, a safe-haven asset, dipped 0.7% to $2,850 an ounce, reflecting renewed investor confidence, while the U.S. dollar steadied after weeks of volatility.
The tariff saga began with Trump’s April 2 declaration of a national emergency over persistent U.S. trade deficits, invoking the International Emergency Economic Powers Act to justify the levies. The policy sparked chaos: global stocks tanked, oil prices plunged, and retaliatory tariffs from Canada, the EU, and others loomed. Critics, including former Vice President Mike Pence, who called it a “major tax hike,” warned of recession risks, while economists like Greg Daco of EY projected a 1.5% hit to U.S. GDP. The pause, however, has quelled some fears—for now. “It’s a breather, not a resolution,” cautioned Peter Orszag, CEO of Lazard, speaking at CERAWeek in Houston. “The Canada-Mexico-EU confusion is paused, but China’s escalation could still derail us.”
Internationally, reactions varied. Canadian Finance Minister Dominic LeBlanc hailed the pause as a “step toward sanity,” while EU Commission President Ursula von der Leyen reiterated calls for a “negotiated resolution” during talks with Chinese Premier Li Qiang. China’s foreign ministry, however, doubled down, with spokesperson Guo Jiakun posting on Facebook, “The U.S. will face the consequences of its bullying.” Japan, facing a 24% tariff now on hold, expressed cautious optimism through Chief Cabinet Secretary Yoshimasa Hayashi, who urged continued dialogue.
For U.S. businesses, the pause offers a lifeline. Retailers like Walmart, braced for higher input costs, and automakers like Volkswagen, which had halted Mexican shipments, can recalibrate. Consumers, too, may dodge immediate price hikes on goods from clothing to cars, though analysts warn that prolonged U.S.-China tensions could still inflate costs. “This is a tactical retreat, not a surrender,” said Kelly Ann Shaw, a former Trump trade adviser, at a Brookings event. “Expect negotiations to dominate the next 90 days.”
As the dust settles, questions linger: Why exclude Russia from tariffs, as some on X have pointed out? Will China’s defiance force Trump’s hand? For now, U.S. exchanges are riding a wave of relief, but the shadow of a global trade war looms large, with the clock ticking toward July 8, 2025.