UPDATED at 6 p.m. Eastern on 4/10/25: After historic gains on April 9 following Trump’s announcement to pause several reciprocal tariffs for 90 days, the markets swung back in the other direction on April 10. As of market close on April 10, the Dow Jones Industrial Average sold off 2.5%, the S&P 500 dipped 3.46%, and the Nasdaq Composite declined 4.31%.1 This serves as a reminder that pullbacks can create opportunities and that having a diversified, long-term approach is critical during times of market volatility.
[1] https://www.cnbc.com/2025/04/09/stock-market-today-live-updates.html
Trump Pauses Several Reciprocal Tariffs for 90 Days
Key Points – Trump Pauses Several Reciprocal Tariffs for 90 Days
- Stock Market Soars After Trump Issues 90-Day Pause for Many Reciprocal Tariffs
- Trump Raises U.S. Tariffs on Chinese Imports
- Three Things to Remember During Times of Market Volatility
- What Does This Mean for Investors?
- 2-Minute Read
Trump Pauses Tariffs for 90 Days
Did you briefly step away from your desk on Wednesday and return to it to find out that the stock market was suddenly surging? Many people might be exhaling, at least for now, after President Trump announced a 90-day pause on several of his reciprocal tariffs.1, 2 He dropped the tariff rate to 10% for all countries except China.3
Reciprocal tariffs can go in a positive direction that creates incentives to lower tariffs and create fair trade in a cooperative spirit. The 90-day pause was greeted enthusiastically by the markets.
This announcement came less than a day after the reciprocal tariffs that Trump issued on April 2 went into effect. Here’s a quick rundown of how the markets reacted to Trump pausing tariffs just after 4 p.m. Eastern time on Wednesday.4
- S&P 500 up 9.25%
- Dow Jones Industrial Average up 7.87%
- Nasdaq Composite up 12.16%
The goal of the 90-day pause is to provide sufficient time for countries to negotiate revised trade agreements that emphasize both mutual fairness and cooperation for the benefit of their respective economies.
Trump Raises U.S. Tariffs on Chinese Imports
Reciprocal tariffs can go also go in a negative direction that raises costs for the consumer, damages relations, and creates disruption in the global economy. While Trump announced the 90-day pause on reciprocal tariffs for about 75 countries who agreed to negotiate, China was not one of them. Trump wrote on Truth Social that he would immediately raise the U.S. imposed tariff to China to 125% due to “the lack of respect China has shown to the World’s Markets. 5”
The round of tariffs that went into effect on Wednesday included a 104% tax on Chinese imports. China retaliated by announcing that it would raise tariffs on U.S. goods from 34% to 84% beginning April 10.6 The U.S. and China combine to make up more than 40% of the world’s Gross Domestic Product.7 Material escalation of tariffs between the two largest economies of the world is unsustainable and not positive for the global economy or capital markets or inflation.
Key Things to Remember About the U.S. Economy
Structurally, the United States is a service sector driven economy, driving 72.2% of GDP.8 Imports represent roughly 13.9% of U.S. GDP.9 While import prices are expected to be fluid in upcoming months, in February, import prices rose 2% year over year.10
What’s Next?
As our Director of Investments Stephen Tuckwood, CFA, mentioned last week in his special market update, the big question was whether the reciprocal tariffs would remain in place permanently or whether they would act as a first point for negotiation. Treasury Secretary Scott Bessent confirmed on Wednesday that Trump’s plan was always to get other countries to negotiate and that “President Trump created maximum negotiating leverage for himself. 11”
While Tuck was spot on with posing that question, we don’t have a crystal ball to predict what will happen next with tariffs and how the markets will react. But given the high market volatility we’ve seen in the past week, it’s important to continue to remember these three things.
- Long-Term Investing Can Pay Off
- Diversification Can Cushion Volatility
- Pullbacks Can Create Opportunities
We’re Here to Answer Your Questions
Rather than making investment decisions that might be fueled by fear or greed, start a conversation with our team below to help assess how this announcement affects your personal situation.
As our team continues to closely monitor the markets and economic trends, please don’t hesitate to reach out with any questions about what Trump’s 90-day pause on reciprocal tariffs means for you. We hope to hear from you soon to discuss your investment decisions and overall wealth management goals.
Resources Mentioned in This Article
- Assessing Market Volatility Following April 2 Tariffs
- Tariff Announcement April 2025 – Special Market Update
- Tariff Talk: What to Watch
Other Sources
[1] https://apnews.com/article/stocks-markets-tariffs-trump-721a3a5971f1b254981d32f4acb9eb17
[2] https://apnews.com/live/stock-market-economy-tariffs-updates-4-9-2025
[4] https://www.cnbc.com/2025/04/08/stock-market-today-live-updates-.html
[5] https://truthsocial.com/@realDonaldTrump/posts/114309144289505174
[7] https://www.worldometers.info/gdp/gdp-by-country/
[8] https://fred.stlouisfed.org/series/VAPGDPSPI
[9] https://data.worldbank.org/indicator/NE.IMP.GNFS.ZS?locations=US
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.