In a dramatic shift that jolted Wall Street into a rally, President Donald Trump said he would temporarily suspend tariffs on many U.S. trading partners while sharply increasing them on Chinese imports.

The move reversed course less than 24 hours after steep new levies had taken effect and triggered a global market rout. The White House confirmed that tariffs on countries willing to enter negotiations would be paused for 90 days, during which the U.S. aims to strike new trade deals.

Meanwhile, Trump raised tariffs on Chinese imports to 125%, up from the 104% rate enacted just hours earlier, escalating tensions with the U.S.'s largest economic rival, Trump announced on Truth Social.

Stocks Surge as Tariff Tensions Ease

U.S. equity markets surged on the news, with the S&P 500 gaining nearly 9% and the Nasdaq climbing more than 12%. The rally followed days of losses driven by fears that aggressive tariffs would tip the economy into recession.

Bond yields, which had been climbing earlier in the day, retreated as investors recalibrated expectations. The dollar also regained strength, particularly against safe-haven currencies like the yen.

Markets welcomed the tariff pause as a sign that the administration might avoid all-out trade conflict with allies. However, for China, the message was the opposite. The sharp increase in duties marks the latest escalation in an increasingly unpredictable standoff. Trump's sudden tariff reversal fits a broader pattern of shifting trade positions that have left world leaders and investors uneasy.

Flip-Flopping Fuels Uncertainty

Whether Trump's 90-day pause leads to concrete trade agreements or simply delays another round of tariffs remains uncertain. U.S. officials say negotiations could span economic, security, and foreign aid matters, but no timeline has been offered. For now, markets are clinging to hopes of resolution despite the lingering risk of another sharp turn.

Expect ongoing updates as this story evolves.

Source: Finance Magnates