WASHINGTON, D.C. — In a surprise move aimed at easing fears of a looming global recession, President Donald Trump announced a 90-day pause on most import tariffs on Wednesday, sending U.S. stocks soaring to historic levels. However, in a simultaneous policy twist, he raised the import tax on Chinese goods to 125%, escalating tensions with Beijing.

The S&P 500 jumped 9.5%, marking one of its biggest single-day gains since World War II. The Dow Jones Industrial Average surged 2,476 points, or 6.6%, while the Nasdaq composite index rose by 9%, reflecting investor optimism in response to Trump’s surprise announcement made via his social media platform, Truth Social.

A Mixed Message to Markets

While the tariff pause was seen as a conciliatory gesture to most trading partners, Trump’s decision to more than triple the import tax on Chinese goods suggests that the trade war with Beijing is far from over. Treasury Secretary Scott Bessent clarified that the 10% tariff on global imports will remain in place, describing it as part of a “reciprocal tariff” strategy.

“Because so many countries have not retaliated, I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period,” Trump posted. The president emphasized the economic unsustainability of previous trade arrangements, stating, “Somebody had to pull the trigger. I was willing to pull the trigger.”

Global Markets React

Markets around the world had already closed when Trump’s announcement hit. In Europe, London’s FTSE 100 fell 2.9%, Paris’ CAC 40 dropped 3.3%, and Tokyo’s Nikkei 225 lost 3.9%. In contrast, Chinese stocks managed to rise — Hong Kong’s index gained 0.7% and Shanghai’s composite climbed 1.3%, possibly reflecting local stimulus expectations.

Meanwhile, China responded swiftly, announcing an increase in its retaliatory tariff on U.S. goods to 84%, up from 34%. Beijing’s move further intensifies the economic standoff between the two largest global economies.

Political Reactions

Michigan Governor Gretchen Whitmer, a Democrat, offered partial support for tariffs while preparing to meet with Trump again this week. Trump hinted that companies severely impacted by the tariffs could receive case-by-case exemptions, though he admitted decisions would be made “instinctively.”

Despite the uncertainty, Wall Street’s rapid recovery showed that investors welcomed the temporary stability, particularly as fears of a recession loomed over recent weeks. Trump also noted that the bond market, which had shown signs of volatility, now appeared “beautiful” and steady.

What’s Next?

With the 90-day clock now ticking, attention turns to whether the U.S. and its trading partners can strike more permanent trade agreements. Analysts warn that if no progress is made, the tariff pause could simply delay an inevitable return to market volatility.