Markets Rebound as Trump Hits Pause on Tariffs

The Trump economic tailspin saga continues. This time, the controversial yet influential US president took a dramatic turn of events on his tariffs, causing the market to rally after days of steep losses.

Here’s what you need to know about this surprising turn of events:

Tariff Pause: Trump Takes a Step Back? 

Trump, who announced sweeping tariffs on both strong and struggling economies and even imposed levies on an island inhabited only by penguins and seals, has yet again made the headlines.

On Wednesday, 9 April, Trump revealed that he would pause tariffs for 90 days for over 75 of the countries that did not reciprocate US tariffs, to be precise. However, and perhaps unsurprisingly, neither China nor the European Union is one of these countries. (Source: NBC News)

US vs. EU & China

It is no secret that both the EU and China retaliated against the US. 

The EU, which suffered from Trump’s steel tariffs, retaliated with levies of up to 25% on (allegedly) hundreds of US products, including meat, iron, steel, home appliances, textiles, tobacco, and ice cream. These tariffs are expected to come into effect next week on 15 April.

China, the US’ longstanding trade nemesis, faced a blow of tariffs reaching an astounding 125% (already in effect). The former retaliated with a reciprocal tariff of 84% on US goods (effective today, Thursday, 10 April). Moreover, the world’s most populous nation issued travel warnings about visiting the US. 

It will be interesting to see what else emerges in light of these trade tensions and how they continue to shape the markets.

How Did the Markets React to this Turn of Events?

After a few days of less-than-rosy performances, the markets experienced a significant rally on Wednesday, 9 April.

Leading Wall Street indices, the S&P 500, the Nasdaq, and the Dow Jones Industrial Average, soared 9.52%, 12.16%, and 7.87%, respectively. Tech stocks, which also took a hit from Trump’s policies, also gained, with Magnificent 7 taking center stage. Tesla soared over 20% (in yesterday’s afternoon trading), Meta +15%, Amazon +12%, Alphabet +10%, Microsoft +10%, and Nvidia +18%. 

These moves may have been what many traders and investors needed at this time of economic turmoil and uncertainty, but only time will tell what else lies ahead.

Market Manipulation or Economic Strategy?

White House advisors insist that Trump has planned this tariff pullback all along. 

According to US Secretary of the Treasury Scott Bessent, “this was his strategy all along,” and “you might even say he goaded China into a bad position. " Bessent refers to the fact that China, which imposed retaliatory tariffs, now faces higher US duties while others get a reprieve.

But whether this is the truth is unclear. What’s for sure is that Trumponomics has certainly shifted the markets since Trump’s re-election in November 2024 and will likely continue shaping them over the course of his presidency.

Conclusion

In conclusion, Trump’s unexpected tariff pause jolted markets back to life on Wednesday, 9 April, delivering a much-needed boost after a string of sharp losses. 

Whether this move was part of a grand strategy or a spontaneous shift remains to be seen. What is certain, however, is that Trump's economic maneuvers—calculated or not—continue to wield enormous influence over global markets.

As trade tensions with China and the EU escalate, all eyes will remain on the White House to see what twist comes next in this ongoing saga of Trumponomics.

*Past performance does not reflect future results.