Trump pauses some tariffs, escalates pressure on China

US stocks went soaring like a kite without a string yesterday, after President Trump announced plans to enact a 90-day pause on certain tariffs for nearly 100 countries, while also keeping his across-the-board 10% tariff in place and ramping up duties on China.

Catch up quick

In a Truth Social post shortly after noon CT, Trump said he authorized a 90-day pause in higher, individualized reciprocal tariffs for all countries outside of China, placing a hold on duties that had officially taken effect early yesterday morning.

• While the 90-day pause is in effect, the countries will be subject to Trump’s flat 10% tariff instead of more elevated rates on an individual basis, the President said.
• In the same Truth Social post, Trump also announced an increase in tariffs on China from 104% to 125% “effective immediately,” in response to Beijing saying earlier Wednesday that it will raise tariffs on US imports from 34% to 84%.

Driving the move: Trump told reporters that he decided to pause the bulk of his reciprocal tariff program due to growing concern over its effect on the US economy—and the bond market in particular.

Markets react: Trump’s decision to delay higher tariff enforcement for many countries sent US stocks into a sharp upswing. All three major indexes were down slightly prior to 12 pm CT, but rocketed upwards following Trump’s announcement to reach historic daily highs across the board:

• The Nasdaq (+12.1%) saw its largest percentage gain since 2001; the S&P 500 (+9.5%) recorded its biggest percentage bump since 2008; and the Dow set a record for most points gained in a single day (+2,963, or +7.9%).

Looking ahead…US officials say they expect global trading partners to offer deals over the next 90 days to reduce their tariffs—even China, who Trump says “wants to make a deal.”