Mere hours after imposing a range of tariffs on global trade partners, President Trump, via a Truth Social post, declared a 90-day pause on the “reciprocal” import duties, effective immediately, while raising tariffs on China to 125%. This followed his April 2 “Liberation Day” tariff plan, which set a 10% baseline tariff on all import and higher reciprocal tariffs on about 60 nations, including a 104% total on China (combining prior duties). The pause lowers the reciprocal rate to 10% for non-retaliating countries, China’s tariff, however, jumped from 104% to 125% due to its 84% retaliation (up from 34%), effective April 10.
U.S. equities surged after the announcement, with the major indices up between 7% and 10%. This reversed a $6 trillion loss in U.S. stocks since April 2. The rally reflected relief from a perceived de-escalation, though China’s exclusion is likely to keep tensions high. Asian markets like Japan’s Nikkei (down 3.5%) and Hong Kong’s Hang Seng (down 4%) had fallen sharply earlier, but U.S. optimism hints at a global rebound at their open.
Government bond yields rose slightly, with the U.S. 10-year Treasury jumping to 4.40% from 4.27%, and the MOVE index eased from 140% to around 120%, reflecting reduced volatility.
U.S. Treasury Secretary Scott Bessent made some quick remarks shortly after Trump announced the 90-day pause for more than 75 countries but a higher levy on Chinese imports. His message to global trading partners: “do not retaliate, and you will be rewarded.”
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