President Trump paused the sweeping reciprocal tariffs the U.S. imposed this week saying dozens of countries had reached out to negotiate new trade deals.
Why it matters: It’s the relief global markets, U.S. allies and many Trump advisers wanted, as fears of a global crisis mounted.
- U.S. stocks promptly kicked off a ferocious rally, with the S&P 500 rising 7% in a matter of minutes.
Catch up quick: Economists had warned Trump’s tariffs could cause a severe global recession, and major investors warned of even worse, up to a possible “economic nuclear winter.”
- Trump announced the tariffs April 2 — a 10% base global tariff as of April 5, and sharply higher reciprocal tariffs on around 60 nations as of April 9.
- The magnitude of the tariffs caught markets off guard, and led some major Wall Street banks and economists to outright predict an almost immediate recession.
Yes, but: While Trump lifted most of the global duties, he raised tariffs on China to 125%, blasting the country for retaliating to his initial levies.
- His global trade war has shifted, for the time being, to a U.S.-China trade war.
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