President Donald Trump said Wednesday he authorised a 90-day pause on sweeping tariffs he recently announced against global trading partners, sending the stock market surging after it tumbled for several days in the face of Trump’s trade war.
Trump announced the pause Wednesday afternoon. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
AFP via Getty Images
Key Takeaways
- Trump said in a post he authorized a 90-day pause on tariffs and a “substantially lowered reciprocal tariff during this period, of 10%, also effective immediately.”
- The 10% baseline rate will apply to all countries including Mexico and Canada and exclude China, which will be hit with a 125% tariff rate after Trump accused it of showing a “lack of respect” to world markets.
- Trump said the tariff pause was done because over 75 countries reached out to the U.S. to negotiate and did not retaliate in response to reciprocal tariffs announced last week.
- The Nasdaq Composite surged over 10% following Trump’s announcement, while the S&P 500 and Dow Jones Industrial Average surged 8% and 7%, respectively, recovering from a slide in points experienced Monday and Tuesday.
- The major indexes are still down significantly from where they stood before Trump’s reciprocal tariffs announcement last week.
How Have Republicans Reacted To The Pause?
Sen. Ted Cruz, R-Texas., said the tariff pause was “terrific,” while Sen. Eric Schmitt, R-Mo., lauded Trump for his “great leadership,” according to NBC News, which noted Sen. Susan Collins, R-Maine, said the pause was not enough and urged Congress to “retake its power to impose tariffs from the executive” branch. Collins was one of four GOP senators who broke from Trump and voted to reject the president’s planned tariffs on Canadian goods.
How Have Democrats Reacted To The Pause?
Gov. Gavin Newsom, D-Calif., said in a post Trump “caved” and “will change his mind again.” Sen. Adam Schiff, D-Calif., told CNN he will ask the White House “to find out who knew about this most recent change in tariff policy cause we want to find out whether people are insider trading on the basis of knowledge about this move or that move on tariffs.”
What To Watch For
Depending on how high the three major indexes close, the Dow and S&P 500 could see their highest percentage gains since 2020, while the Nasdaq could experience its largest boost since 2008.
Tangent
Shares of Trump Media and Technology Group rocketed over 20% Wednesday afternoon to about $20, recovering from days worth of losses.
Key Background
Trump announced tariffs against some 180 countries last week as part of his goal to bolster manufacturing in the U.S. Global markets slid significantly after the announcement, with the U.S. stock market reaching volatility levels not seen since the COVID-19 pandemic. Prior to the tariff pause, several economic experts warned of a likely recession as the U.S. economy braced for tariffs to go into effect.
By Tuesday, the Dow had dropped 12% on the sweeping tariffs announcement, with the S&P and Nasdaq falling 13% and 14% in that same period, respectively. Trump did not appear intent on backing down from his sweeping tariffs early this week, telling reporters he was not considering a pause on tariffs, but that he was planning to negotiate unique trade deals with countries hit by the U.S. tariffs. White House Press Secretary Karoline Leavitt said Monday that reports about a 90-day pause were “fake news.”
Treasury Secretary Scott Bessent, who will lead negotiations with over 75 countries, said Wednesday discussions will “take some time” and “are going to be bespoke.” Some countries that have already stepped up to negotiate trade deals include Japan, Israel, South Korea, the United Kingdom, Australia and several more.
