In a stunning policy shift, former President Donald Trump on Tuesday announced the immediate suspension of tariffs for over 75 countries for a 90-day period, while simultaneously raising tariffs on Chinese imports to an unprecedented 125%. The move, posted on Trump’s Truth Social account, triggered a powerful rally on Wall Street, calming fears of a prolonged trade war.
Wall Street Roars in Relief
U.S. equities responded with sharp gains. The Dow Jones Industrial Average surged over 2,500 points, or 6.8%, while the S&P 500 rose 7.8% and the Nasdaq Composite jumped 9%—its strongest single-day performance since 2008.
Economists and investors credited the rally to temporary relief from escalating global trade tensions. “Markets were bracing for the worst. This pause is a welcome breather,” said Emily Carter, Chief Market Strategist at Horizon Investments.
Trump’s Announcement via Truth Social
In a lengthy post, Trump declared:
“Because of the disrespect China has shown to the World’s Markets, I am today raising the Tariff on China imposed by the United States of America to 125%, immediately… I have introduced a 90-day PAUSE, and a greatly reduced Reciprocal Tariff for the period, of 10%, effective immediately.”
He claimed that more than 75 nations had asked U.S. trade authorities to negotiate an end to disputes regarding tariffs, currency manipulation, and trade barriers, prompting the temporary tariff suspension.
China and EU Retaliate
In response, China immediately raised its own tariffs on U.S. goods from 34% to 84%, reaffirming its earlier pledge to “fight to the end” in the face of what it called economic aggression. The European Union followed suit, increasing tariffs by 25% on a broad range of U.S. imports.
These retaliations have sparked concern among global supply chain experts. “While the markets are celebrating now, the long-term impact of such steep tariffs on China could be deeply disruptive,” warned trade economist Lisa Grant of the Peterson Institute.
Technology Stocks Lead the Charge
Apple Inc., which manufactures a significant portion of its products in China, saw its shares jump 12% to $193.59, despite analysts warning the company could face higher production costs due to the China tariff hike. Trump Media & Technology Group (DJT), the parent company of Truth Social, also saw a 19% surge in early trading following the platform’s prominent role in the announcement.
A Temporary Fix or Long-Term Strategy?
The 90-day suspension of tariffs is being viewed by many as a strategic pause intended to open the door to global trade negotiations. However, critics argue it adds another layer of uncertainty to an already volatile global economy.
“Trump’s tactic gives space for talks, but the aggressive stance on China could escalate into more serious trade friction,” said political economist Dr. Harold Marks of Georgetown University.
Next Steps and Global Watch
With dozens of countries expected to enter negotiations with the U.S. Trade Representative, Treasury, and Commerce Department over the next three months, the direction of global trade remains in flux.
The question now: will this ceasefire lead to stable long-term trade reform—or reignite the fires of economic nationalism?
Sources: Truth Social, Yahoo Finance, Barron’s, AJC, Nebraska Examiner, HuffPost Spain, El País, Spectrum News, Investopedia.
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