Markets revive after Trump sets 90-day pause on many tariffs, hikes China to 125%

U.S. President Donald Trump speaks during an executive order signing in the Oval Office at the White House on Feb. 11, 2025, in Washington, D.C. (Photo by Andrew Harnik/Getty Images)
WASHINGTON — Suddenly veering from his declaration a week ago, President Donald Trump on Wednesday paused his sweeping “liberation day” tariffs for 90 days on countries he’s said are willing to negotiate new trade deals.
Stocks surged upon his announcement after days of wrecked markets erased trillions of dollars from investor portfolios. The Nasdaq index saw the biggest single-day hike in five years as of Wednesday afternoon, according to financial media.
The pause will not extend to China, which he announced will see a further hike to 125% on imports to the U.S. “effective immediately,” he said.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump posted on Truth Social just after 1 p.m. Eastern.
The president said more than 75 countries have reached out to negotiate, and that because “these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States” he is dropping their tariff rates to a universal 10%.
Several rounds of tariffs the president enacted in March will remain in place, including 25% import taxes on foreign steel, aluminum and cars — charges which sparked the European Union to approve retaliatory tariffs Wednesday.
Canada and Mexico, which both face up to 25% tariffs on a sizable chunk of products, will continue to see the levies but will not face an additional 10% stacked on top.
Trump’s 25% tax on imports from any country that buys oil from Venezuela also remains unchanged.
Americans ‘yippy’
The president told the press outside the White House Wednesday afternoon that he saw people getting “queasy” and “yippy” about the market turmoil.
“You have to have flexibility,” Trump said about his decision to pause the levies.
The tariffs, which the administration maintains are “reciprocal,” though under a formula disputed by economists, went into effect just after midnight Wednesday.
When asked by reporters if he’ll consider exempting any large companies that lost big in the market crash from paying the baseline 10% import tax, Trump said he’ll rely on his “instinct” to make the decision.
The announcement came just hours after the president posted on social media “BE COOL!” and “THIS IS A GREAT TIME TO BUY!!! DJT.”
Trump’s sudden pause also came just after U.S. Trade Representative Jamieson Greer defended the steep tariffs to nervous lawmakers for the second day in a row.
Administration officials quickly claimed the sudden pause was part of Trump’s strategy all along — despite several saying over the last few days that the tariffs were here to stay and that Americans needed to have patience as the market crashed. More than half of Americans are invested in the stock market.
White House Deputy Chief of Staff Stephen Miller characterized Trump’s about-face on tariffs as “the greatest economic master strategy from an American President in history,” in a post on X Wednesday afternoon.
A rollercoaster few days
Trump’s tariff plan sent shock waves through the economy after he unveiled import taxes on trading partners and allies, including 46% for Vietnam, a major tech exporter to the U.S.
The administration calculated the steep tariff rates based on each country’s trade deficit with the U.S.
Treasury Secretary Scott Bessent told reporters outside the White House Wednesday that the tariffs were “a successful negotiating strategy.”
“As I told everyone a week ago in this very spot: Do not retaliate, and you will be rewarded,” Bessent said.
The administration met with Vietnamese officials Wednesday, according to Bessent, and meetings with Japan, South Korea and India are expected shortly, though he didn’t provide details.
When asked by reporters if Trump’s tariff policy was mainly now focused on China, Bessent said “it’s about bad actors” but added that China “is the biggest source of the U.S. trade problems.”
The trade war — a term Bessent rejected — between the U.S. and China expanded rapidly overnight Wednesday when Chinese officials raised levies on U.S. goods to 84%.
“The US’s practice of escalating tariffs on China is a mistake on top of a mistake, which seriously infringes on China’s legitimate rights and interests and seriously damages the rules-based multilateral trading system,” according to a translation of a statement Wednesday from the country’s State Council Tariff Commission.
Pressure from lawmakers
A Trump campaign account posted on X a screenshot of the president’s morning message urging people to buy stocks and asked “Did the Panicans listen to @POTUS’s advice this morning?”
“Panicans” is a term Trump used recently to mock lawmakers who openly criticized losses to retirement funds and questioned how the tariffs would affect small businesses in their districts.
Republican Sens. Thom Tillis of North Carolina and James Lankford of Oklahoma grilled Greer Tuesday during a hearing before the Senate Committee on Finance.
“Whose throat do I get to choke if this proves wrong?” Tillis asked.
Greer faced questions Wednesday morning from the House Committee on Ways and Means, where Chair Jason Smith of Missouri cheered on Trump’s choice to unleash tariffs on almost every country at once.
Rep. Richard Neal, the panel’s top Democrat, told Greer that his office has been “inundated” with calls from constituents worried about their 401k funds.
“They don’t know what to expect, trillions of dollars of market value being lost even as we meet,” the Massachusetts Democrat said at the morning hearing before Trump called off the tariffs.
Democratic Sen. Adam Schiff said Wednesday that he’s asking the White House if any insider trading occurred while Trump was “creating giant market fluctuations with his on-again, off-again tariffs.”
“Who in the administration knew about Trump’s latest tariff flip flop ahead of time? Did anyone buy or sell stocks, and profit at the public’s expense?” Schiff wrote on X.
Democratic Sen. Maria Cantwell of Washington and Republican Sen. Chuck Grassley of Iowa introduced a bipartisan bill to claw back Congressional power over trade decisions from the president, who currently has near-unilateral authority.
GOP Rep. Don Bacon of Nebraska introduced companion legislation in the House.
While Trump imposed some of his tariffs — including those on foreign steel and aluminum — under a national security provision, he levied the charges on Canadian and Mexican imports as well as his recent worldwide tariffs by declaring a national emergency.