Trump pauses tariffs for 90 days, markets skyrocket

U.S. markets recovered a chunk of their losses over the past week on Wednesday after President Donald Trump paused all additional tariffs for 90 days on all trading partners except China.

Trump kept the 10% baseline tariffs on its trading partners, but eliminated the additional tariffs that had gone into effect today.

“[B]ased on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump wrote Wednesday afternoon on Truth Social.

It was confirmed by Treasury Secretary Scott Bessent, who spoke to reporters Wednesday afternoon.

“It took great courage, great courage for him to stay the course until this moment,” Bessent told reporters, according to ABC News. “Do not retaliate, and you will be rewarded.”

Bessent added that the negotiations are going to take time, and “President Trump wants to be personally involved,” thus the 90-day pause, reported NPR.

Tariffs boosted on China

However, Trump not only maintained the additional tariffs on China, he increased them to 125% from 104%. This comes after China raised tariffs on U.S. imports today to 84%.

“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 wrote in the Truth Social post.

The markets were soaring on the news, with the Dow Jones up more than 2,500 points, or 6.7%. The Nasdaq rose 1,466 points or 9.7%, while the S&P 500 jumped 387 points or 7.8%. Also, the Russell 2000 surged 150 points, or 8.5%.

These gains were the biggest gains for the indexes since 2020.

While it is a major reset and provided much relief for investors, the 10% tariffs remain for now, as do the massive tariffs on China.