Trump pauses tit-for-tat tariffs for 90 days, ups China's levy to 125%
Editor's Note: This page is a summary of news on tariffs for Wednesday, April 9. For the latest news, view our story for Thursday, April 10.
President Donald Trump on Wednesday said he was authorizing a 90-day pause in some targeted tariffs to all countries except China, on which he was raising the levy to 125% in the latest twist of a saga that has roiled financial markets for a week. The universal 10% tariffs remain in place.
The U.S. markets immediately responded with exuberant joy, as all three major indexes rose by at least 6% by 2 p.m. ET. They all closed with huge gains, led by the Nasdaq's 12.16% and followed by the S&P's 9.52% and the Dow's 7.87%.
Earlier in the day China and the European Union unveiled stiff retaliation fees aimed at countering the U.S. tariffs blitz, while an unfazed Trump urged global companies to set up shop in the U.S. The Chinese Finance Ministry announced 84% tariffs on U.S. goods starting Thursday, up from the 34% previously announced.
At a session with reporters, Trump was asked why he paused the tariffs and he said some folks were getting spooked without specifying who.
"People were jumping a little bit out of line,'' Trump said. "They were getting a little bit yippy, a little bit afraid.''
The EU said earlier Wednesday it would impose 25% tariffs on a range of U.S. imports in a first round of countermeasures. The 27-member bloc was facing U.S. tariffs of 20% on most products and higher duties on autos and steel, but because its retaliatory tariffs have not been applied yet, the EU's duties were reduced to 10%.
The brunt of Trump's wrath was clearly aimed at China, which Treasury Secretary Scott Bessent described as a "bad actor'' in addressing reporters in front of the White House shortly after the latest tariffs announcement.
“Do not retaliate and you will be rewarded,’’ Bessent said.
Trump had rolled out a flurry of individual-nation levies on trading partners, including one sky-high fee: a tax on Chinese goods of 104%. This after implementing a sweeping tariffs plan that imposed 10% levies on almost all imports, which has not been lifted. Targeted U.S. tariffs of up to 50% on more than 50 nations went into effect Wednesday at 12:01 a.m. and will now be suspended, except for China's.
Developments:
∎ The U.S.-China tariff dispute could cut trade between the two nations by as much as 80% and divide the world's economy into two blocs, the World Trade Organization warned Wednesday.
∎ French Finance Minister Eric Lombard reduced the country's 2025 growth forecast from 0.9% to 0.7% amid the global trade war precipitated by Trump.
∎ China began censoring some tariff information on social media. Hashtags and searches for "tariff" or "104" were mostly blocked on social media platform Weibo.
Trump touts stock market jump after major drop
Trump touted the stock market jump that followed his announcement on the tariffs pause, though his administration's moves spurred it into a four-day nosedive.
"Up 2,500 points. Nobody has ever heard of it. Gotta be a record,” Trump could be heard telling Sen. John Barrasso, R-Wyo., before an event on the South Lawn of the White House showcasing race cars.
Trump reiterated the now-halted tariffs were necessary despite the global upheaval they caused.
The president also maintained that China, despite its hostile response to the tariffs, wants to reach a trade agreement but hasn't figured out how.
“It's one of those things − they're proud people,'' he said. "And President Xi (Jinping) is a proud man. I know him very well. And they don't know quite how to go about it.”
A sudden reversal, and more tension with China
The three-month tariffs suspension marks a dramatic retreat for Trump, who on Monday said he wasn’t interested in a pause and just hours before Wednesday’s announcement urged Americans to “BE COOL!” in a post on social media.
Bessent, explaining the sudden shift, told reporters the Trump administration has been “overwhelmed” by the more than 75 countries that have approached the U.S. seeking trade deals after the president first announced the sweeping tariffs last week.
“We are expecting them to come with their best deals,” Bessent said. “As I said a week ago today, don't retaliate, hold your ground, let's see what happens. And China, they have kept escalating and escalating, and now they have 125% tariffs.”
Bessent credited Trump for creating “maximum negotiating leverage” to bring much of the world to the negotiating table while China sits out.
Previously imposed 25% tariffs on certain goods from Mexico and Canada, which weren't part of last week's tit-for-tat tariff rollout, are not affected by Trump’s pause. The suspension also does not extend to industry-specific tariffs that Trump imposed on steel, aluminum and auto imports.
Republican lawmakers breathe a sigh of relief
Many GOP lawmakers were visibly relieved that Trump paused some of the the sweeping country-specific tariffs that have caused the stock market to plummet in recent days.
Said Sen. Rand Paul, R-Kentucky, who has been an ardent critic of tariffs: "The marketplace likes it, the stock market likes it, I like it. I think if millions of investors pull $6 trillion out when they see tariffs and put $4-5 trillion back in when they see tariffs being paused, somebody should be learning from that."
Paul added that Trump appears to be listening to advisers who say they should "take the victory" and negotiate − and if they're successful in negotiating lower tariffs, "it may look genius."
"Trump's a good dealmaker," said Sen. Chuck Grassley, R-Iowa, who has introduced a bipartisan bill to assert Congress' power to stop tariffs implemented by presidents. "It brings predictability, it shows moderation, it shows that there's kind of an end game, and I think it's going to bring credibility to this whole process."
Sen. Eric Schmitt, R-Missouri, who has defended the tariffs, said the strategy showed "this broad realignment that puts America's interests first."
− Riley Beggin
A 125% tariff means costlier iPhones, furniture, paint and other products
At what point does an iPhone get prohibitively expensive? At $3,000-4,000, perhaps?
The 125% tariff the Trump administration is imposing on China could drive up the price of such smart phones to that level, at least the large majority Apple makes in China, unless the company eats into its profits. Experts said the cost of the popular phones could rise to $2,300 when the tariff was set at 54%, before jumping to 104% and 125% in recent days amid an escalating trade war.
And iPhones represent just a small portion of the items the U.S. imports from China, the world's largest exporter, which provided 16.5% of the foreign-made goods brought into America in 2022.
According to the Commerce Department, China supplies more than 50% of the U.S. imports of textiles, furniture, bedding, lamps, toys, games, sporting equipment and paint. The cost of all those is expected to rise substantially.
− Kinsey Crowley
Americans altering travel plans in light of economic turmoil
The threat of tariffs and the signs of a possible recession are impacting Americans' traveling decisions, but it's too soon to tell whether the three-month suspension on the duties will have an effect.
A flash study conducted April 3-5 by the integrated travel marketing firm MMGY revealed 83% of Americans are planning to travel over the next year – a 4% decrease from mid-February numbers.
Just as significant, 80% of the 1,000 surveyed Americans said they will also change the way they travel, opting for cheaper or shorter trips, domestic destinations and not going far from home. Part of that is due to rising costs across the board, while over half of respondents said it's also because they think the recent tariffs will drive an anti-American sentiment abroad.
Amid the economic certainty, this summer is expected to be slower than usual for the travel industry, according to new research by Bank of Montreal. Inbound travel demand turned negative in February for the first time since January 2020, with March dropping 12% for the steepest year-over-year decline since May 2009.
− Kathleen Wong
Bessent on China tariff response: 'So what?'
Before Wednesday's policy shift, Bessent downplayed the impact of China’s 84% retaliatory tariffs on U.S. exports and called a trade war between the U.S. and Beijing “a loser for them.”
“They are the surplus country. Their exports to the U.S. are five times our exports to China, so they can raise their tariffs, but so what?” Bessent said in a Wednesday morning interview on Fox News.
Bessent called it “unfortunate” that China does not want to negotiate trade policy with the U.S. “because they are the worst offenders in the international trading system.”
“They have the most imbalanced economy in the history of the modern world. And I can tell you that this escalation is a loser for them,” he said. “They have some very smart economists, academicians, technocrats within their bureaucracy, and they would be telling the leadership that we do not have the edge here.”
Baldwin: 'China cheats,' but Trump’s tariffs hurt families
Sen. Tammy Baldwin thinks much about Trump’s trade policy is reckless, but the Wisconsin Democrat agrees that China is a bad actor that hurts U.S. workers. Speaking to CNN on Wednesday, Baldwin said she believes “China cheats” because its government subsidizes industry, which creates an unlevel playing field.
“Wisconsin is a state that makes things. We’re a big manufacturing state,” Baldwin said. “But when you have an un-level playing field, you see the results. We lose jobs. We see China being able to undercut and underprice.”
In a news release Wednesday, Baldwin said there is much about Trump’s trade policies that “will only jack up costs for working families,” but that she is glad his administration is closing a trade loophole for China that allows illegal substances and counterfeit goods to enter the country
“I have fought to close this loophole for years to keep our families safe and stand up for Wisconsin workers, and I’ll continue to push Donald Trump to tackle the fentanyl epidemic, level the playing field for our businesses and give Wisconsin workers a fair shot,” she said.
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US might approach China on tariffs after deals are struck
Bessent suggested early Wednesday the U.S. and other allies could approach China about a potential trade deal after the Trump administration first reaches agreements with Japan, South Korea and other countries on tariffs.
“At the end of the day, we can probably reach a deal with our allies − with the other countries that have been good military allies, not perfect economic allies – and then we can approach China as a group,” Bessent said in remarks to the American Bankers Association’s summit.
China is not among the 70-plus countries that have reached out to the U.S. about making a trade deal following Trump’s universal tariffs announced last week. The full tariffs kicked in Wednesday. China responded Wednesday with retaliatory 84% tariffs on U.S. exports and Trump responded with a 125% levy.
The Trump administration has already started negotiations with South Korea and Japan. Bessent said the administration is also meeting with a delegation from Vietnam,
“In terms of escalation, unfortunately the biggest offender in the global trading system is China, and they're the only country who's escalated,” Bessent said, adding that any country that aligns itself with China over the U.S. on trade would be making a serious mistake. “That would be cutting your own throat.”
Delta Air Lines CEO: 'Growth has largely stalled'
Delta Air Lines has been bracing for the impact as tariffs on the travel industry. Ed Bastian, the airlines CEO, said Wednesday during its first quarter earnings report that Delta is scaling back growth plans for this year.
"With broad economic uncertainty around global trade, growth has largely stalled," he said in a statement.
Bookings are already softening from corporate and leisure customers, especially in domestic markets, although according to Delta, premium and international demand remains strong so far. Cirium, an aviation data analytics firm, said bookings are down for summer travel to Europe based on bookings from third-party platforms.
What do tariffs mean for families?
Price increases triggered by tariffs will be "practically unavoidable” and families should expect to pay “a lot more for almost everything they can buy,” said Emily Gee, senior vice president of inclusive growth at the Center for American Progress, a left-leaning policy and advocacy think tank.
Summertime already brings added costs for many families, because children aren’t getting meals at school and working parents have to pay for child care. Utility costs can go up in the summer, too. Angela Williams, president and CEO of United Way Worldwide, said she’s worried rising prices will make it even harder for struggling families to afford the basics, like food and rent.
Tariffs will hit low-income households hardest, Gee said, noting families who tend to buy more expensive items can avoid the price hikes by substituting for cheaper ones even if they have to compromise on quality.
“If you’re someone who’s already trying to make ends meet by being frugal and doing all of that comparison shopping and stretching your dollar, you are just going to have to eat that price increase," she said.
− Madeline Mitchell
This panel makes the call on recessions
The odds of the U.S. entering a recession are higher today than they were before the trade war began, many experts say. A group of eight economists who serve on the Business Cycle Dating Committee, within a nonprofit research organization not affiliated with the federal government known as the National Bureau of Economic Research (NBER), actually determine whether the economy has fallen into recession.
A recession is informally considered at least two straight quarters of declining economic output. But the technical definition is “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” according to NBER. The committee considers several factors, when making its determinations, including real income, payroll employment, consumer spending, industrial production and gross domestic product.
“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” NBER says on its website.
There is no fixed rule on when NBER declares a recession, but the committee’s website says it waits long enough to ensure the peak months in economic activity are “not in doubt.”
The most recent recession, which began in February 2020, was called in June 2020. It wasn't until July 2021 that the committee determined the downturn had ended 15 months earlier in April 2020. Other determinations have taken up to 21 months, according to NBER's website.
Trump again makes pitch for moving companies to US
Trump continues to make a pitch for companies to open manufacturing plants in the U.S.
"This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing," Trump said in a Truth Social post. "ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!"
Ackman gets the 90-day pause he called for
Maybe someone finally listened to Bill Ackman. The billionaire hedge fund manager, a vocal supporter of Trump, had pleaded for a third time earlier Wednesday for the White House to rethink the trade war.
"If the president doesn’t pause the effect of the tariffs soon, many small businesses will go bankrupt," Ackman said in a Wednesday morning post on X. "Medium-sized businesses will be next."
After the tariffs were paused, Ackman posted: "Thank you on behalf of all Americans.''
Ackman has been waging a public campaign to pause the policy for the past week as the market has taken significant hits since the Trump administration unleashed global tariffs on U.S. allies and adversaries. But thus far the president hasn't indicated he will back off.
"A 90-day pause will enable (Trump) to accomplish his objectives without destroying small businesses in the short term," Ackman said Wednesday. "May cooler heads prevail."
Shark Tank's 'Mr. Wonderful': 'I've had enough' of China
Many wealthy and high-profile allies have spoken out against Trump's global trade war, but there are still some who think waging it against China is the right move. Kevin O'Leary, known as "Mr. Wonderful" on the reality television series "Shark Tank," is among them. He said China has never played by international trading rules, and that many voters may not like Trump's style but that the president is standing up for American businesses and entrepreneurs who've had their intellectual property stolen.
"This is not about tariffs anymore," O'Leary said on CNN. "Nobody has taken on China yet. Not the Europeans, no administration for decades. As someone who actually does business there, I've had enough."
But Trump's approval numbers are beginning to falter as Americans see their 401(k) plans suffer significant losses. A Reuters/Ipsos poll last week showed the president's approval rating fell to 43%, down 4 points from a similar survey when he took office in January.
What is a stock market correction?
Correction territory is generally understood to mean a stock market indicator has dropped at least 10% from its recent market high. This is different from bear market territory, which refers to a stock market drop of 20% or more from a recent peak, or a closing high.
Every investment is susceptible to corrections. They can apply to individual stocks, bonds, or stock indexes such as the Dow, S&P 500, and Nasdaq.
Several things can prompt a correction, including a change in economic policy, newly released jobs or inflation data and company earnings reports.
−Rachel Barber
Contributing: Reuters