U.S. stocks saw a significant increase on Wednesday after President Trump announced a 90-day pause on the higher tariffs he had planned for most countries, excluding China. In a post on social media, he revealed plans to raise tariffs on China to a whopping 125%. This came after China imposed an 84% retaliatory tariff on American goods earlier that day.
Trump emphasized that he would continue with a 10% tariff on other countries, even as he put the higher tariffs on hold for now. He expressed his frustration with China, saying, “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.”
Interestingly, more than 75 countries reached out to his administration to negotiate their tariffs. In response, Trump decided to authorize a 90-day pause on the increased tariffs and set a lower reciprocal tariff of 10% during this period.
The announcement had a positive effect on the markets. The Dow Jones Industrial Average jumped over 2,000 points, which is a rise of 6.1%. The S&P 500 climbed more than 7%, while the Nasdaq saw an impressive 9% increase as trading progressed.
This dramatic market response highlights the ongoing sensitivity to trade issues and tariffs. According to a recent survey by the National Retail Federation, about 70% of retailers believe that tariffs hurt American consumers more than they help protect domestic industries.
As we observe these shifts in trade policy, it’s worth noting the historical context. The U.S. has a long history of using tariffs to navigate trade relations, dating back to the Tariff Act of 1789. However, modern trade wars have been marked by rapid back-and-forth actions, often leading to uncertainty in the markets.
Market participants are clearly reacting to these developments, with social media buzzing about the implications for both the U.S. and global economies. Investors appear eager for clarity and a resolution that stabilizes trade relations, rather than further escalations or retaliations.
For further insights on the impact of tariffs on the economy, you can check out the World Trade Organization report that discusses trade barriers and their effects on global markets.
Check out this related article: How Trump’s Tariff Strategy is Challenging the Global Economy and Igniting a Rebellion
Source link