Global Markets Surge as Trump Hits Pause on Tariffs but Intensifies China Trade Fight
In a dramatic turnaround that roiled financial markets worldwide, President Donald Trump this week announced a 90-day pause on harsh new tariffs for many countries, sparking a historic rally on Wall Street and stock exchanges across Asia and Europe. The partial reprieve came amid fears of a brewing financial crisis fueled by Trump’s sweeping tariff offensive, which had rattled investors and spiked government bond yields. Yet, notably, the intensified tariff war with China shows no signs of cooling down — signaling turbulent economic times ahead.
The initial market reaction was euphoric. On Wednesday, the S&P 500 logged its biggest one-day gain since October 2008, buoyed by Trump's surprise climbdown. 
The last week had seen Trump impose “reciprocal” tariffs upwards of 24% to 32% on dozens of trading partners, rattling global commerce. On China, however, duties exceeding 100% remained intact and were in fact set to be raised to 125%. Beijing hit back with its own sweeping retaliatory tariffs of up to 84%, further deepening the rift between the world’s two largest economies.
Behind Trump’s partial tariff retreat was a mounting sense of economic alarm. According to sources familiar with the decision, Trump’s aides, including Treasury Secretary Scott Bessent and Vice President JD Vance, urgently warned that a rapid surge in bond yields risked triggering a dangerous financial spiral. The 10-year Treasury yield had shot up from under 4% to 4.5% within days, reflecting investors dumping both stocks and bonds simultaneously — a rare and ominous phenomenon last seen during the 2020 pandemic crash.
Trump had projected confidence just hours before the decision, urging on social media: “BE COOL! Everything is going to work out well.” Yet he admitted later that traders were "getting yippy" — spooked by economic disarray partly of his own making.
“I know what the hell I’m doing,” Trump defiantly insisted at a GOP fundraiser Tuesday night, but by Wednesday afternoon he chose to temporarily suspend the tariffs on allies to calm markets and buy time for new negotiations. The pause does not extend to China, which Trump accuses as the chief offender on unfair trade.
Commerce Secretary Howard Lutnick affirmed there were no ongoing talks with Beijing, but hinted Trump expected to speak directly with President Xi Jinping soon. European Commission President Ursula von der Leyen called the partial pause “an important step towards stabilizing the global economy.”
Yet experts warn a lasting solution remains elusive, especially as US-China ties deteriorate. Economists at Goldman Sachs still see a 45% chance of recession within a year. Chief economist Joe Brusuelas noted that the shock relief rally might not offset underlying damage from tariff hikes and market turmoil.
China, meanwhile, responded by weakening the yuan to its lowest point since 2007— a tactic that may cushion Chinese exporters but risks inciting further US criticism. 
For some on Main Street, like a three-time Trump voter whose business lost half its revenue amid the trade chaos, the pain is real — yet loyalty to the president remains steadfast, capturing both the economic stakes and political complexities of this simmering dispute.
In sum, Trump’s tariff pause delivered instant market relief but left fundamental disputes unresolved — especially with China, which faces even steeper duties. The coming weeks will test whether this truce evolves into durable trade deals, or a brief calm before the next trade storm erupts. What do you think about Trump’s tariff gamble and its impact on the world economy? Share your thoughts below.
Related issues news
When did Trump announce the tariffs?
On April 2—a day he called 'Liberation Day'—Trump signed an executive order imposing a minimum 10% tariff on all U.S imports beginning April 5.
What is the trade war with China?
On April 9, 2025, the U.S. imposed a 125% tariff on Chinese goods, while China imposed a 84% tariff on American goods.
Does China have tariffs?
China Customs assesses and collects tariffs. Import tariff rates are divided into six categories: general rates, most-favored-nation (MFN) rates, agreement rates, preferential rates, tariff rate quota rates, and provisional rates. As a member of the WTO, imports from the United States are assessed at the MFN rate.
Does Ukraine have tariffs?
Ukraine imposes several duties and taxes on imported goods: customs/import tariffs, value-added tax (VAT), and excise duties.
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