Part 6/12:
Market Reactions and Policy Announcements
In a remarkably timed move, President Trump announced a 90-day pause with a reciprocal tariff rate of 10%, effective immediately. Simultaneously, tariffs on China are set to increase again to 125%, intensifying the trade warfare. This strategic pause allows negotiations to proceed while signaling tough stance—an apparent attempt to bring China to the negotiating table without immediate damage to markets.
The market’s response was swift and exuberant, with the S&P 500 and NASDAQ rallying sharply. Elon Musk observed that this could be the beginning of a “reshuffle” of global supply chains and trade alliances, potentially reducing China’s economic influence and boosting the U.S. manufacturing sector.