Trump Halts Tariffs, Stoking Market Optimism Amid Trade Tensions

U.S. stocks rallied as President Trump decided to pause tariffs for 90 days on most nations, except China, which remains subject to a significant tariff hike. This move comes amid escalating trade tensions and reflects changing dynamics in international trade policy.

In a surprising turn of events, U.S. President Donald Trump announced a 90-day hiatus on reciprocal tariffs for most countries, leading to a notable surge in U.S. stocks. However, this pause notably excludes China, which will see its tariffs increase to an imposing 125 percent on exports to the United States. This strategic decision follows China raising tariffs on American goods by 84 percent, amid an ongoing trade conflict between the two economic giants that shows no signs of resolution.

The White House has clarified that while the overall tariff rate will be relaxed to 10 percent, this adjustment will not apply to Canada and Mexico, both of which are significant trading partners for the U.S. The abrupt policy shift follows the European Union's initial retaliatory trade measures and comes as U.S. bonds also saw a sell-off, reflecting a wave of market turmoil across the globe.

When questioned about his decision to pause the tariffs, Trump remarked, “Well, I thought that people were jumping a little bit out of line. They were getting yippy. They were getting a little bit afraid.” He reassured that “nothing is over yet,” and noted a strong interest from "many more than 75" countries in establishing trade agreements. The Secretary of the Treasury supported Trump's reversal as part of the president's broader strategy, indicating long-term trade maneuvering is in play.