Major Shift in US Trade Policy: 90-Day Tariff Suspension Announced, Stricter Measures on China, Stock Markets Surge

In a strategic shift in trade policy, President Donald Trump has authorized a 90-day suspension of additional tariffs on numerous countries that have opted not to retaliate, marking a step back from what could have escalated into a widespread trade war. This decision was announced amid a tumultuous week in global markets, characterized by significant sell-offs and economic uncertainty. The decision, outlined via a post on Truth Social, is in response to over 75 countries reaching out to negotiate.

The stock market responded positively to the news, with Wall Street experiencing substantial gains. The S&P 500 surged by more than 7%, while the Nasdaq Composite increased almost 9%. This rally added approximately $3.2 trillion to the market value of the S&P 500 by the afternoon in New York, according to calculations based on FactSet data.

Simultaneously, the administration has sharply increased tariffs on China, raising them to an unprecedented 125%. This action intensifies the trade standoff with China.

This pivot away from widespread tariffs has been met with relief by global markets and economists, who had warned that continued tariff expansions could push the U.S. economy toward recession while exacerbating inflation and unemployment rates. Significant gains were noted among major companies like Tesla, Apple, and Nvidia, each jumping over 10% following the announcement. These gains are seen as a reversal of the steep losses experienced since the initial tariff announcement.

The 90-day tariff pause is viewed as a preliminary step toward more extensive, parallel trade negotiations expected to take place over the coming weeks between the U.S. and its primary trading partners. This series of negotiations, aiming to alleviate commercial tensions and potentially lower tariffs further, will be closely monitored by global markets.

Despite these positive developments in international relations, a 10% blanket levy on most imports from around the world that took effect earlier in April is being maintained, focusing the stricter trade measures specifically against China. This complex situation continues to unfold as global markets and political leaders react to the shifting dynamics of U.S. trade policy.