Trump Pauses Tariffs for 90 Days

Wall Street Soars as Trump Pauses Tariffs for 90 Days, Targets China with 125% Levy

US stock markets witnessed a dramatic surge following President Donald Trump’s unexpected decision to suspend tariffs for 90 days on countries that haven't retaliated against American trade policies. This move sent major indices sharply higher, with the S&P 500 gaining up to 8% and the tech-driven NASDAQ spiking by nearly 9%. At the time of the latest figures, NASDAQ was still trading up close to 7%.

The market rally came on the heels of an official post by Trump on his social media platform, Truth Social, where he revealed that while easing tariffs for some countries, he also moved to sharply increase tariffs on Chinese imports, setting the new rate at 125%. He attributed the decision to what he described as China’s continued disregard for fair trade practices and global market stability. He emphasized that the era of the United States being exploited economically was coming to an end, and that these tariffs were meant to send a clear message.

The president’s announcement sent waves through financial circles, as traders digested the implications of both the temporary easing for some and the sharp escalation for China. The move appeared to be a calculated step to open space for negotiation while maintaining pressure on key rivals. Observers were also anticipating live remarks from the president later in the day to provide further clarity.

Earlier, the US Treasury Secretary, Scott Bessant, addressed reporters outside the White House, offering sharp criticism of China’s economic behavior. He characterized it as historically unbalanced and a major source of global trade disruptions. According to Bessant, the imposition of previous US tariffs had already resulted in Chinese goods being diverted to European markets. He stopped short of calling the situation a full-blown trade war but indicated that Beijing had escalated tensions, prompting what he called a bold and necessary response from the administration.

Bessant further explained that the tariff pause had always been part of the administration’s broader strategy. The president, he said, had long considered a temporary hold while increasing pressure on China, and it was a deliberate decision to announce it at this particular time. He reiterated that few political figures could generate negotiating leverage the way President Trump does.

In New York, a reporter covering the financial markets described the day’s market movement as nothing short of explosive. The NASDAQ had jumped over 10%, while the S&P 500 and Dow Jones rose significantly, with the Dow gaining more than 2,500 points—a 6.8% spike. Just hours earlier, the markets had been deep in the red, rattled by retaliatory tariffs from China, Canada, and the EU.

Analysts noted that Bessant’s framing of the 90-day pause as a “temporary floor” appeared to resonate strongly with investors. The pause created a window of certainty that markets had been craving, and it signaled a willingness by the US to return to negotiations. The sentiment on Wall Street was that diplomacy was once again on the table, replacing escalating trade aggression. Investors are known to respond well to predictability, and this development offered just that.

At the same time, political observers and market participants alike began debating whether the US government had made a calculated strategic move from the outset, or if growing pressure from investors and lawmakers had forced a shift in stance. Either way, the consensus was that Beijing’s trade behavior—particularly the influx of low-cost goods—was being directly challenged.

Recent developments also suggest that Washington’s focus has narrowed. After naming dozens of countries in past tariff talks, the administration now appears to have honed in almost exclusively on China as the central player in the ongoing dispute.

Thomas Hayes, who heads investment firm Great Hill Capital, called the shift a major turning point. He argued that while recent market volatility had sparked comparisons to past financial crises, the root causes this time were political and thus could be resolved swiftly. In his view, the president’s tactic of turning up the pressure only to dial it back strategically was a familiar and effective pattern.

Hayes highlighted that the new across-the-board 10% tariffs (a relative de-escalation) now seemed far less intimidating, and that both businesses and markets were relieved. With the pressure off for the moment, he believed there was room for more reasonable negotiations to take place over the coming three months. He suggested the current environment would allow for trade balance issues to be addressed in a more structured way.

He also pointed out that, while not everyone might agree with how the administration handled the rollout, the return of some rationality to the policy conversation was welcomed. For investors, this was a moment to act—not cautiously, but boldly.

Still, not everyone was convinced the situation was as calculated as some officials suggested. Critics argued that the flip-flopping on trade policy created instability and damaged confidence. Some viewed the sudden pause as a sign that the US had caved under pressure.

Hayes acknowledged the recent market volatility had been taxing, even for seasoned investors. But he said it also showed that efforts were being made in good faith to fix long-standing imbalances in global trade. He expected that talks with China could extend beyond the 90-day window, but believed some level of communication would resume in the near future. He anticipated that once negotiations kicked off, attention would shift back to economic fundamentals like earnings, job growth, and business investment.

Reaction was not limited to US officials. The German chancellor-designate, Friedrich Merz, issued a statement suggesting that European unity had played a role in softening the US approach. He suggested that a firm, coordinated front from allies had proven effective. With multiple governments likely to claim victory, analysts speculated this could be a case where no one got everything they wanted—but everyone could still walk away saving face.

Hayes summed up the atmosphere by saying that successful deals often leave no party completely satisfied. As long as the global economy could return to a focus on progress and cooperation, that would be a win in itself. He said the real challenge now lies in tackling the newly announced 125% tariff on Chinese imports, which remains a significant pressure point.

Yet he remained optimistic that dialogue would resume. Hayes predicted that while immediate talks may not materialize, within a few weeks a path forward could emerge. He anticipated a compromise somewhere in the middle, one that might not delight either side, but would allow both to move ahead and stabilize economic relations.