U.S. President Donald Trump speaks, as he signs executive orders and proclamations in the Oval Office at the White House in Washington, D.C., U.S., April 9, 2025.
Nathan Howard | Reuters
U.S. President Donald Trump has hit the pause button on his heavy “reciprocal” tariffs and swapped them for a universal 10% rate for 90 days. Stocks ripped higher on the news, hitting historic numbers. Treasury Secretary Scott Bessent said it was Trump’s plan “all along.”
Evidence does show this could have been the case with Trump tariffs. Hours before the president announced his plan, he wrote on Truth Social, “BE COOL! Everything is going to work out well,” before adding, “THIS IS A GREAT TIME TO BUY!!!” Those comments suggest that the pause was indeed baked into the plan.
Whether the plan is a good one is another matter. Investors should not let themselves be swept away by the flood of euphoria in markets Wednesday. Remember, Trump allowed a mere 90-day pause to allow for deals to be made. The 10% tariff is not the permanent rate. Relief rallies are also most prevalent during long-term downturns, such as during the 2000s dot-com bubble or 2008 financial crisis.
As negotiations play out, uncertainty — the bane of markets — is still the name of the game.
What you need to know today
Trump drops tariffs to 10% for 90 days
U.S. President Donald Trump cut new tariff rates on imports from most U.S. trade partners to 10% for 90 days to allow negotiations with those countries. Trump announced the pause on Wednesday, hours after goods from nearly 90 nations became subject to stiffer, so-called reciprocal tariffs. Treasury Secretary Scott Bessent told reporters the pullback in tariffs was Trump’s strategy “all along.” However, Trump raised tariffs on imports from China to 125% after Beijing on Wednesday hiked its tariffs on U.S. imports to 84% from 34% starting April 10.
Massive and historic stock surge
U.S. stocks rocketed Wednesday as a relief rally gripped markets. The S&P 500 surged 9.52% for its biggest one-day gain since 2008 and the third-biggest jump in post-WWII history. The Dow Jones Industrial Average popped 7.87%, its biggest advance since March 2020. The Nasdaq Composite spiked 12.16%, notching its largest one-day gain since January 2001 and second-best day ever. About 30 billion shares traded hands, making it the heaviest volume day on Wall Street in history, according to records that go back 18 years.
Just a dead-cat bounce?
It might be too early to cheer the market gains. The Nasdaq Composite had its second-best day Wednesday, trailing only its 14.17% jump in January 2001 — which was in the middle of the dot-com crash. And during the financial crisis in October 2008, the Nasdaq enjoyed two of its best five days ever. Call it a dead-cat bounce, a relief rally or short covering. It’s a familiar reaction during the worst of times for Wall Street, wrote CNBC’s Ari Levy.
European Union prepares countertariffs
The European Union on Wednesday voted to approve its first set of retaliatory measures to counter 25% tariffs — which are separate from so-called reciprocal tariffs — imposed by the U.S. on steel and aluminum. The European Commission, the bloc’s executive arm, said, prior to Trump’s announcement, duties would start on the first tranche of tariffs on U.S. imports from April 15, with a second set of measures following on May 15. Europe’s regional Stoxx 600 fell 3.5% Wednesday, with markets closing before new tariff developments.
[PRO] Goldman raises, then cuts, recession odds
Less than an hour before Trump’s tariff pause, Goldman Sachs hiked its forecast of a U.S. recession and predicted the country’s economy to shrink this year — then the bank almost immediately rescinded it. Here’s what Goldman chief economist Jan Hatzius is saying about the updates on U.S. trade policy.
And finally…
A container cargo ship at a port terminal in Thailand.
Mr.cole_photographer | Moment | Getty Images
Trump’s tariff plan is throwing into disarray companies’ efforts to diversify out of China
Many companies had been steadily reducing their reliance on China as a manufacturing hub since President Donald Trump’s first term. One of them is Steve Greenspon, CEO of Illinois-based houseware company Honey-Can-Do International, who started moving more of his production from China to Vietnam.
Then Trump’s latest “reciprocal” tariffs came along. “It’s crushing to our company. It is disappointing. It is saddening. It’s frustrating,” Greenspon said.
“As a U.S.-based company, this is incredibly hurtful that our own government is doing this to us,” he said, noting that moving production back to the U.S. is not an option, given high labor costs and the absence of requisite infrastructure.
