In a dramatic policy shift, US President Donald Trump has announced a temporary pause on newly imposed tariffs for dozens of countries, calming rattled markets after a wave of financial volatility. Meanwhile, his administration is doubling down on tariffs against China.
Speaking to reporters on Wednesday, April 9, Trump explained his decision came after observing sharp market swings following the latest wave of tariffs. “I saw last night that people were getting a little queasy,” he said. “The bond market right now is beautiful.”
The move comes just one day after steep tariffs took effect, triggering the most intense market turmoil since the early days of the COVID-19 pandemic. The volatility wiped out trillions in global stock value and sent bond yields soaring — developments that analysts believe prompted Trump’s swift reversal.
Under the updated plan, the US will suspend specific tariffs on select countries for three months, giving space for negotiations. However, the president is maintaining a tough stance on China, announcing a hike in duties on Chinese imports to 125%, up from the 104% rate set just hours earlier.
“This was his strategy all along,” said Treasury Secretary Scott Bessent. “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.”
Despite the partial rollback, a broad 10% tariff on nearly all imports remains, and existing duties on autos, steel, and aluminum are unaffected.
The announcement spurred a rebound in financial markets, with the S&P 500 soaring by 9.5%. Bond yields eased and the US dollar regained strength, although analysts caution the bounce may be short-lived given lingering uncertainty.
Goldman Sachs responded by adjusting its recession forecast, dropping the likelihood from 65% to 45%. Still, the firm noted that the remaining tariffs would raise the average tariff burden by 15%.
As talks begin with over 75 countries, including Japan, South Korea, and Vietnam, Bessent, who is leading the negotiations, declined to offer a timeline for resolutions. Meanwhile, discussions with China appear to be on the back burner.
A Reuters/Ipsos poll reveals Americans remain wary, with 75% expecting higher prices in the coming months, signaling that despite the market rally, economic concerns remain front and center.
