Markets Rally as Trump Backtracks on Reciprocal Duties, Pausing Tariffs For 90 Days

Seismic shakeups to global trade took shape Wednesday as the Trump administration’s reciprocal tariffs were slated to take effect—but didn’t.

The stock market was rocked by news in the early morning hours that China had drastically escalated its retaliatory duties on the U.S., and the European Union approved 25-percent tariffs as a countermeasure to the president’s steel and aluminum tariffs, announced last month. “BE COOL! Everything is going to work out well,” Trump Truthed as the markets trembled.

But by early afternoon, the president seemed to realize all was not, in fact, cool. Hitting back at China, Trump posted that he would raise the stakes in the trade war, upping import duties on China-made goods to 125 percent, effective immediately.

Highlighting the contrasting stance of about 75 other U.S. trading partners, which have rushed to the phones to implore the president to reconsider double-digit duty increases, Trump said he would authorize a 90-day pause—“and a substantially lowered Reciprocal Tariff during this period” of 10 percent, also effective as of Wednesday.

The president attributed the backtracking to the fact that “these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States.”

Within minutes of the news breaking, the markets rallied. The Dow Jones Industrial Average surged 5.8 percent, gaining 2,189.42 points, while the S&P 500 rose 6.9 percent, or 345.37 points—both indexes seeing their largest one-day gains since 2020. The Nasdaq Composite jumped 9.7 percent, or 1,480.86 points.