U.S. stock indexes surged on Wednesday afternoon following an announcement from President Donald Trump that he'll pause reciprocal tariffs for most countries except for China.
The S&P 500 soared 9.5 percent on Wednesday. The index is still lower than it was when Trump announced his sweeping set of tariffs last week. The Dow Jones Industrial Average increased by nearly 3,000 points, while the Nasdaq shot up by 12.1 percent.
In the latest move, Trump said he would suspend targeted tariffs on other countries for 90 days to allow time for U.S. officials to negotiate with countries that have sought to reduce them.
Trump told reporters on Wednesday that his decision to launch the tariffs was needed because the situation with the United States’ trading partners “wasn’t sustainable.”
“Somebody had to pull the trigger. I was willing to pull the trigger,” the president said.
He said that he had been watching volatility in the bond market in recent days and appeared to suggest that was one of the reasons why he had initiated the pause.
“I was watching the bond market. The bond market is very tricky. I was watching it. But if you look at it now, it’s beautiful. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy,” he said.
Trump also said he watched a Fox Business interview with JPMorgan Chase CEO Jamie Dimon earlier on Wednesday. According to Trump, Dimon had “made the statement to the effect that something had to be done with the tariffs and trade ... he understood it.”
“It is perfectly reasonable for someone to say that trade was unfair. There were unfair trade things,” he told the outlet. “I think they have the [value-added tax] wrong, how they understand it. And I think they should really get a better understanding, to make it easier to negotiate.”
White House press secretary Karoline Leavitt and other officials said that a 10 percent baseline tariff will be left intact for nearly every country except for China, whose rates were raised by the Trump administration. The announcement also does not appear to affect duties on autos, steel, and aluminum that are already in place.
Trump said he would raise the tariff on Chinese imports to 125 percent from the 104 percent level that took effect on Wednesday, as the two countries have traded tit-for-tat tariff hikes over the past week. Beijing said on Wednesday that it would impose an 84 percent duty on all U.S. imports, while the European Union approved retaliatory tariffs against the United States.
U.S. Treasury Secretary Scott Bessent told reporters that the reversal was a reward for countries that refrained from retaliating against the United States and that Trump used the duties to create “maximum negotiating leverage.”
“This was his strategy all along,” he said. “And you might even say that he goaded China into a bad position. They responded. They have shown themselves to the world to be the bad actor.”
During the 2024 campaign, Trump repeatedly said that he would use tariffs against U.S. trading partners and that other countries that adopt more protectionist policies are taking advantage of Americans.
Several weeks ago, the president deployed his first round of tariffs against Mexico and Canada for their alleged failure to curb illegal immigration and fentanyl trafficking, while imposing an additional duty on Chinese products.
