Stocks surge as Trump unveils 90-day tariff pause – Daily Business

Stock markets surged after President Donald Trump confirmed a 90-day pause on tariffs for non-retaliating countries.

Wall Street’s S&P 500 leapt 6%, while the Nasdaq Composite rocketed almost 8% higher just as traders expected a downturn following his decision to hike the tariff on China to 125%.

“Instead, they were given the first proof that Washington is beginning to reckon with the consequences of its own economic experiments,” said Nigel Green, chief executive of deVere.

Mr Trump’s decision to bring tariffs down to the baseline 10% was good news for about 75 countries and punishment for China which had earlier raised tariffs on US imports to 84%.

However, it was not clear if the stay of execution is extended to the European Union, which earlier today approved a first set of retaliatory tariffs that would take effect on 15 April.

The 10-year Treasury yield edged up by 0.1 percentage point to 4.37%, showing investors are still cautious about the ever-changing whims of the president. 

“The markets have been crying out for common sense,” said Mr Green.  “The economic vandalism of tariffs was never sustainable. A backpedal wasn’t just likely — it was always inevitable.”

Mr Trump had denied speculation from a government source earlier this week that he would introduce a 90-day pause, though commentators correctly predicted he would want to claim credit for himself.

Critics of his tariffs and rapid policy changes included leading Democrat Chuck Schumer who said of the president: “He is reeling, he is retreating, and that is a good thing.”

He described the administration’s process as “government by chaos”.

However, the White House and its supporters claimed the markets and media had called it wrong and that the president had been vindicated.

“Many of you in the media clearly missed the ‘art of the deal’ — you clearly failed to see what President Trump is doing here,” said Karoline Leavitt, the press secretary.

Senator Ted Cruz, a Trump ally, said he spoke with the president for an hour last night and urged him to take the path of lowering tariffs.

He also told Fox News that he believes the president is “exactly right and fighting for reciprocity”. The Texas senator said Mr Trump’s focus on China is good for US national security and economic security.

Peter Navarro, Mr Trump’s trade adviser, turned fire on “all the nervous nellies” on Wall Street and accused them of undermining the president.

The tariffs situation has “unfolded exactly the way it should” and is now going to move “fast and beautifully”, he added.

Earlier, China’s finance ministry increased the 34% tariff on all US goods coming into China to 84% as tensions between the two countries show few signs of easing.

The move by the Beijing government will be a blow to US companies selling into China which has also threatened to ban some products.

It warned Mr Trump of a strong reaction if he followed through on his promise to increase the US tariff on Chinese goods to 104%.

Chinese state media has been ridiculing other countries that are taking a begging bowl approach to Washington, saying this will only encourage Mr Trump into thinking he can dictate world trading terms. However, these countries are now benefiting from the change of policy.

Nearly three-quarters of Americans expect the tariff war to raise prices of everyday items, a new Reuters/Ipsos poll found.

Sir Keir Starmer hopes to soften the blow of the US tariffs on the UK by seeking to strengthen trade links with other countries, which includes rebuilding ties with the European Union.

The Chancellor Rachel Reeves said: “In a changing world, this Government is accelerating trade deals with the rest of the world to back British business and provide the security working people deserve.

“We are going further, faster to create the best possible conditions for British business by working to reduce barriers to trade.”

She also said a UK-EU summit on 19 May would be a chance “to refresh our relationship and make it easier for businesses to trade”.

London’s FTSE 100 index closed before the President’s 90-day pause was announced, ending the session 231.05 points (2.925) lower at 7,679.48..