Published on April 9, 2025 | Money Flow Insight – World & Markets Desk
In a surprising yet strategic move, U.S. President Donald Trump announced a 90-day pause on reciprocal tariffs for all countries—except China. This announcement sent shockwaves through global markets, resulting in a 1,800-point surge in the Dow Jones and a 6% rally in the S&P 500.
The decision comes after over 75 countries formally requested trade negotiations, prompting the U.S. to ease tariff pressures temporarily. However, China has been singled out for what Trump described as a “lack of respect” for global trade norms, facing an immediate tariff hike to 125%.
“I have authorized a 90-day PAUSE and a substantially lowered Reciprocal Tariff during this period of 10%, also effective immediately — except for China.”
While most trading partners will benefit from the temporary 10% tariff cap, China’s tariffs were drastically increased. Trump stated that China’s continued manipulation of trade, currency, and non-monetary barriers could no longer be tolerated.
Market Response: A Much-Needed Boost
The global stock markets had been reeling since Trump’s initial “Liberation Day” tariff declaration a week ago, which included steep duties on nearly all imports. Tuesday saw volatility across major indices, including a dramatic sell-off in U.S. government bonds. However, Wednesday’s announcement brought swift relief:
Dow Jones Industrial Average surged 1,800 points
S&P 500 jumped 6%, closing at 5,281.44
Volatility Index (VIX) saw a sharp decline
Investor sentiment shifted positively as the announcement signaled potential diplomatic openings, reducing immediate fears of a prolonged global trade war.
China Reacts: Trade War Far From Over
Trump Tariff Pause 2025
While most countries welcomed the move, China retaliated with its own aggressive measures. Following Trump’s new 125% tariff imposition, Beijing raised its tariffs on U.S. goods from 34% to 84%.
The escalation suggests that the U.S.-China trade war is intensifying, even as broader global tensions temporarily ease.
Why This Matters: Economic & Strategic Impact
Trump’s tariff pause may be seen as a calculated attempt to:
Calm market volatility
Appease international allies
Put maximum pressure on China
With key elections looming and investor confidence wavering, this decision may serve both economic and political objectives. Analysts believe Trump is isolating China diplomatically while opening the door for negotiation with cooperative nations.
“This move allows Trump to appear tough on China while simultaneously reducing backlash from allies,” said Dr. Meredith Stone, a senior economist at Global Trade Watch.
Supply chain disruptions from U.S.-China decoupling
Commodity price instability, especially in oil and rare earth elements
Investor caution over the unpredictability of U.S. trade policy
Global markets will be watching closely in the coming weeks. If China and the U.S. fail to reach any diplomatic resolution, the current pause may become irrelevant, and tariff escalation could return in full force.
Strategic Play or Political Theater?
Some analysts argue that Trump’s decision is as much about optics as it is about trade policy. By giving the appearance of being open to talks with 75+ countries while targeting China specifically, Trump is reinforcing his “America First” doctrine without completely alienating allies or markets.
The 90-day timeline also suggests a strategic testing phase, possibly meant to pressure China into a new trade framework or to assess global economic responses ahead of domestic elections.
Conclusion: Temporary Relief, But Uncertain Future
Trump’s 90-day tariff pause for all countries except China is a bold and calculated move that has provided immediate market relief and geopolitical breathing room. However, with China responding forcefully, the trade war remains a high-stakes chessboard with no clear endgame yet.
As global investors, policymakers, and businesses digest this development, one thing is clear: The road ahead remains uncertain, and vigilance is critical
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