Donald Trump on Wednesday announced a 90-day “pause” on tariffs for countries who are actively negotiating new trade deals with the United States, reducing penalties to 10% for compliant nations while simultaneously hitting China with a whopping 125% tariff on import goods.
Trump announced both moves in the same Truth Social post. The financial markets responded positively to the midday decree after an already promising Wednesday morning, with the S&P 500, Nasdaq, and Dow Jones all starting the day with healthy gains.
The early trading action came after the president placed a 104% tariff on China at 12:01 a.m. ET. He bumped that up to 125% in his midday announcement, writing:
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”
Trump also thanked the 75 countries who have reached out to U.S. agencies “to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs.” Trump said because these countries have not retaliated, he has authorized a “substantially lowered” reciprocal tariff of 10% on them for the next 90 days.
In a matter of minutes, the Dow Jones Industrial Average popped over 40,000 points for the first time since April 3, while the S&P 500 jumped from a morning low just below 5,000 to a brief high of 5,393 in afternoon trading. The Nasdaq was up nearly 10% with an hour to go before Wednesday’s market close.
The surge was good for media and tech stocks, which suddenly leaped higher on Wednesday afternoon. Comcast, Apple, and Netflix were all enjoying big jumps, with each company seeing its share price increase more than 6%, while WB Discovery’s stock price surged 17.69%.
The Wednesday announcement somewhat validates since-retracted reports by Reuters and CNBC from Monday, when both outlets went with stories saying a 90-day pause – except for China – was being considered by the president.
