Global Stocks on a Rollercoaster Ride Following Tariff Pause

What Happened?

Stocks in Asia, Europe, and the United States rebounded after President Trump announced a pause to his newest round of tariffs.

The pause is to be at least ninety days in duration according to the White House. Most of the recent tariffs were frozen by the decision.

New tariffs on China remained in place, as did the baseline ten percent tariffs on all other goods which had been previously imposed by the Trump Administration.

Why it Matters

The market volatility reflects the volatility of the Trump Administration, which until yesterday maintained that the new tariffs would not be paused. 

President Trump posted on Truth Social that the reason for the pause was over seventy nations had signaled their desire to negotiate to end the tariffs. While some countries had indeed expressed an interest in negotiations, Europe and China were not among them. Those two markets represent the largest trading partners with the United States.

Meanwhile Treasury Secretary Scott Bessent said a pause in the tariffs had been the plan all along. That clearly contradicts statements President Trump made since the new tariffs were put in place. 

President Trump had for days constantly said he would not pause the tariffs, and that he believed they were short term pain needed to make long term gains.

If market behavior could be treated as an expression of opinion, there is little doubt the business world prefers that the tariffs be removed for good. The rise of stocks after the tariff pause and the crash just after the tariffs were implemented is compelling evidence the business world doesn’t see any value in the tariffs.

To the contrary, the global market has indicated tariffs are bad for business.

In contrast to a demonstrated willingness to negotiate new trade arrangements with most countries, President Trump added still more tariffs on China. He raised them to 125% — effective immediately. He cited what he says is "the lack of respect that China has shown to the World's Markets."

China has responded with retaliatory tariffs of its own on American goods.

The ninety day pause creates time for negotiations to take place. But it’s unclear whether they will now that President Trump has given up the leverage he said he needed to force such talks. 

How it Affects You

Increased market volatility and the continued enforcement of earlier tariffs are already triggering price increases for consumers on a range of goods and services. 

It would be understandable if other countries wondered why they should believe the ninety-day pause will last given the erratic behavior of the Trump Administration over the past few months.

Not to mention why they should trust that any new deals struck would be honored since the Trump Administration has already abandoned the decades long practice of mutually agreed tariff increases.