As of 8:30 PM CEST on April 9, 2025, President Donald Trump’s announcement of a 90-day pause on most new tariffs has created a significant shift in global trade dynamics and market sentiment. However, the decision excludes China, where tariffs have been raised to 125%, escalating tensions between the two largest economies.
Key Developments
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Tariff Pause: Trump announced a temporary suspension of most tariffs for 90 days, reducing the universal tariff rate to 10%. This decision follows severe market disruptions caused by last week’s steep tariff hikes during the so-called “Liberation Day” announcement.
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China Tariffs: In contrast to the pause for other nations, tariffs on Chinese imports were increased from 104% to 125% earlier today. Trump cited China’s “lack of respect” and its retaliatory measures as reasons for the hike.
Market Reactions
The financial markets responded positively to the tariff pause. U.S. indices saw strong rebounds:
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The Nasdaq surged nearly 8%, leading gains among major indices.
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The S&P 500 rose by approximately 6%.
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The Dow Jones climbed by 5.2%, with tech stocks like Apple soaring over 11%.
Despite this recovery, global markets remain cautious due to ongoing uncertainty surrounding U.S.-China relations. Oil prices hit four-year lows earlier in the day, and bond markets showed signs of stress, reflecting broader economic concerns.
International Responses
China
China retaliated by raising tariffs on U.S. goods from 34% to 84%. Beijing vowed to “fight to the end” and criticized Trump’s actions as destabilizing for global trade. The Chinese government has not announced immediate additional measures but promised to protect its interests.
European Union
The EU implemented its first wave of retaliatory tariffs, imposing a 25% duty on a range of U.S. products, including steel, aluminum, and agricultural goods. The bloc emphasized that these measures could be suspended if negotiations with the U.S. yield a balanced outcome.
Other Countries
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Vietnam: Facing a 46% tariff, Vietnam offered to eliminate all tariffs on U.S. imports in exchange for relief.
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Japan and South Korea: Hit with tariffs of 24% and 25%, respectively, both nations have initiated talks with U.S. officials to seek reductions.
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Hong Kong: The U.S. has imposed a combined tariff of 54% on Hong Kong goods, including a recent 34% tariff. Hong Kong’s Chief Executive, John Lee, described U.S. tariffs as “reckless” and vowed to maintain Hong Kong’s free port status without retaliatory measures. The city plans to sign more free trade agreements to mitigate risks.
Domestic Criticism
Trump’s tariff strategy has faced backlash from prominent business leaders and economists who warn of potential recessionary effects. Treasury Secretary Scott Bessent defended the pause as an opportunity for negotiation while maintaining that “everything is on the table” for future deals.
While the tariff pause has provided temporary relief to markets and some trading partners, the exclusion of China underscores deepening tensions that could escalate further. With retaliatory measures from key allies like the EU already in motion and China vowing resistance, global trade remains under significant strain.
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