U.S. Stocks Soar as President Trump Pauses Some Tariffs

Summary

WSJ What’s News: U.S. Stocks Soar as President Trump Pauses Some Tariffs

Release Date: April 9, 2025

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Introduction

In this episode of WSJ What’s News, hosted by Alex Osola from The Wall Street Journal, listeners are provided with an in-depth analysis of the significant market movements triggered by President Trump's latest tariff policies. The episode delves into the implications of the 90-day pause on most retaliatory tariffs, the escalation of tariffs on China, and the broader economic and global repercussions of these decisions.

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President Trump's Tariff Announcement

At 00:33, Alex Osola reports that U.S. markets experienced a rally following President Trump's announcement of a 90-day pause on most retaliatory tariffs. This pause applies to all trading partners except China, which faces an increased tariff rate of 125%.

Trump elaborated on his decision via his Truth Social platform, stating that reciprocal tariffs would be reduced to 10% immediately for nations engaging in negotiations on trade, barriers, and currency manipulation. However, China was explicitly excluded from this pause due to what Trump described as China's persistent lack of cooperation:

"The world's second largest economy had shown a lack of respect throughout the tariff skirmish and would now face even loftier levies."
— President Trump ([00:54])

Treasury Secretary Scott Besant provided further context during a news conference, emphasizing the administration's negotiating leverage:

"President Trump created maximum negotiating leverage for himself and the tariffs went into effect 15 hours ago... We have been overwhelmed by the response from mostly our allies who want to come and negotiate in good faith."
— Treasury Secretary Scott Besant ([02:22])

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Market Reactions and Analysis

The immediate market reaction was overwhelmingly positive. At 04:27, Alex Osola highlights that U.S. stocks surged, marking a historic rally with approximately $5.1 trillion added to market capitalization—the largest one-day gain on record. Specific indices saw remarkable increases:

• Nasdaq: Up over 12%
• S&P 500: Up nearly 10%
• Dow Jones Industrial Average: Up about 8%, adding more than 2,900 points, its largest one-day point gain ever.

Investing columnist Spencer Jacob provided insights into this phenomenon:

"The reaction was the most violent positive reaction that I've ever seen in stock markets."
— Spencer Jacob ([05:04])

However, Jacob cautioned about the sustainability of this rally:

"When smoke clears tomorrow... we might resume a downward trend because this all has been a hit to the economy... the chaos and the uncertainty surrounding the tariffs."
— Spencer Jacob ([05:24])

He also noted the potential long-term impact on businesses, particularly small enterprises and importers, which might be reflected in the upcoming jobs report.

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Expert Opinions

An Economic Commentator offered a nuanced perspective on the market's response:

"Wall Street's sort of still figuring it out... what the market is seeing is it seems to be celebrating that there's maybe a pain threshold or a willingness to back down on some of these, to negotiate... a lot of businesses hurt by this next month's jobs report."
— Economic Commentator ([03:12])

Furthermore, Mr. Secretary Ryan December, covering markets for The Journal, advised caution despite the market's exuberance:

"What it means in practice remains to be seen."
— Mr. Secretary Ryan December ([03:04])

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Global Responses to Tariff Pause

The global landscape reacted swiftly to Trump's tariff adjustments:

• China escalated its retaliation by increasing tariffs on U.S. goods from 34% to 84%, mirroring the maximum levels previously set by the U.S. White House. Additionally, China issued warnings targeting American tourism and education sectors.

• The European Union approved an initial list of U.S. goods subject to tariffs, including staples like soybeans and orange juice, although American whiskey was exempted.

These responses underscore the persistent tension in international trade relations and the potential for further economic discord.

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Impact on Importing Processes

The implementation of Trump's new tariffs introduced complexities into the importing process. Liz Young, a Journal reporter covering logistics and supply chains, explained at 09:10:

"Companies that may have only previously had to calculate one duty rate may now have to calculate three or four or more... this is making a process that might have previously been, let's say, 10% for any item imported is now several line items that they have to go through and calculate."
— Liz Young ([09:10])

Key points include:

• Exemptions: Shipments already en route before the new tariffs took effect at 00:01 are exempt.
• Increased Complexity: Companies must collaborate with licensed customs brokers to navigate multiple duty rates based on product composition and country of origin.
• Operational Adjustments: Businesses are adjusting by enhancing their partnerships with customs brokers, who are critical in managing the recalibrated import processes.

Liz Young emphasized the reliance on these brokers to mitigate the administrative burden:

"Customs brokers specialize in this. They have to set up their systems... to help with the importing paperwork, help with calculating the duty rate, help with facilitating payment."
— Liz Young ([10:12])

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Conclusion

The episode of WSJ What’s News provides a comprehensive overview of the immediate and potential long-term effects of President Trump's tariff policies. While the market initially responded with unprecedented gains, expert analyses suggest that the underlying economic challenges and global tensions may temper these positive sentiments in the near future. The complexities introduced into the importing process highlight the tangible impacts on businesses, signaling a period of adjustment and uncertainty ahead.

Listeners are left with a clear understanding of the multifaceted nature of trade policies and their far-reaching implications on both the U.S. economy and international relations.

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Produced by: Pierre Biennime and Anthony Banci
Supervising Producer: Michael Cosmitis
Host: Alex Osola
Source: The Wall Street Journal

Transcript

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[Alex Osola]

US markets rally after President Trump announces a 90 day pause on most retaliatory tariffs People were.

[Market Analyst]

Jumping a little bit out of line. They were getting yippee, you know, they were getting a little bit yippee, a little bit afraid.

[Alex Osola]

But Trump escalates the trade war with China, raising its tariff rate to 125%.

[Economic Commentator]

While sort of lost maybe in the rejoice of the concessions and the pause that Trump has made this afternoon, that's still to come and to play out and we're going to see a lot of businesses hurt by this.

[Alex Osola]

And no matter what the rate is, new tariffs make the process of importing goods way more complicated. It's Wednesday, April 9th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. President Trump said this afternoon that he has authorized a 90 day pause on reciprocal tariffs for all trading partners except China, sparking a broad based market rally due to the temporary reprieve from the trade war. On his truth social platform, the president said that reciprocal tariffs will also be lowered to 10%, effective immediately. That won't be the case for China, he said, which now faces a 125% tariff. Trump said his decision to pause the tariffs was based on the fact that more than 75 countries have engaged with representatives of his administration to open negotiations regarding trade, trade barriers, tariffs, currency manipulation and other matters. The president excluded China from the 90 day pause, saying in his post that the world's second largest economy had shown a lack of respect throughout the tariff skirmish and would now face even loftier levies. At a news conference after the announcement, Treasury Secretary Scott Besant was asked by reporters why President Trump chose to pause these tariffs now.

[Treasury Secretary Scott Besant]

President Trump created maximum negotiating leverage for himself and the which tariffs went into effect 15 hours ago? The ones that we have lowered went into effect a week ago or they were announced a week ago and we have just been overwhelmed, overwhelmed by the response from mostly our allies who want to come and negotiate in good faith. So we are expecting them to come with their best deal. As I said a week ago today, don't retaliate, hold your ground. Let's see what happens. And China, they kept escalating and escalating and now they have 125% tariffs that will be effective immediately.

[Alex Osola]

Mr. Secretary Ryan December, who covers markets for the Journal, told me that while markets are celebrating, what it means in practice remains to be seen.

[Economic Commentator]

Wall Street's sort of still figuring it out. A lot of analysts and investors seem to be operating under the impression that the 10% tariffs blanket are still on tariffs on specific items and sectors like autos and steel are still on, but that those big 50 and 40% on every country you can think of, that those are on pause. And really the market, what we're seeing is it seems to be celebrating the that there's maybe a pain threshold or a willingness to back down on some of these, to negotiate. Of course, this still leaves a huge escalation in the trade war with China and that while sort of lost maybe in the the rejoice of the concessions and the pause that Trump has made this afternoon, that's still to come and to play out. And I would expect that we're going to see a lot of businesses hurt by this next month's jobs report is going to be really enlightening in terms of small businesses and importers and how they're faring and whether they' able to keep their staffing at such a high level as it's been for a few years. The market, once we get past this sort of overall celebration, we'll start to look at individual companies and parse the winners and losers. They'll start to see which companies, you know, can't do without China.

[Alex Osola]

US Stocks stage a historic rally after days of market turmoil, gaining roughly $5.1 trillion in market cap today, the largest one day market cap gain on record. The Nasdaq roared ahead over 12%. The S&P 500 added nearly 10%. And the Dow moved about 8% higher, adding more than 2,900 points, its largest one day point gain on record. I'm joined now by investing columnist Spencer Jacob. Well, Spencer today offered some good news on tariffs that investors seem to really be hankering for.

[Spencer Jacob]

Yeah, that's putting it mildly. It was news that they were hankering for and the reaction was the most violent reaction, positive reaction that I've ever seen in stock markets.

[Alex Osola]

So obviously everything is up, up, up today. How sustainable really is this, especially given this escalation of the trade war with China.

[Spencer Jacob]

We're down 3 point something percent since the Liberation Day announcement. We're down less than 10% from the peak. So we never actually closed in a bear market 20% from the peak to be down 3 point. That's fair. That's actually getting off very mildly. So when we resume trading, we could see more declines. When people have time to think about it, the sort of reaction that we saw today is exaggerated by how people are positioned because people got very, very defensive. And so when you have this kind of sudden reversal, this piece of news that's a bombshell like this, the announcement that tariffs would be suspended for a while, it can elicit a reaction that's in excess of the economic benefit of the news itself. When smoke clears tomorrow, we might not like we've had in the last few days, we might resume a downward trend because this all has been a hit to the economy. Not just the tariffs themselves, but the chaos and the uncertainty surrounding the tariffs.

[Alex Osola]

That was WSJ investing columnist Spencer Jacob. Thanks so much, Spencer.

[Spencer Jacob]

Hey, thanks for having me.

[Alex Osola]

President Trump's new batch of tariffs went into effect at midnight last night. Of course, the President's announcement of a 90 day pause on them this morning will change things for most nations, but already some governments had responded to the tariffs. This morning, China said it's raising its additional tariff on U.S. goods from 34% to 84%, matching what was at the time the latest level imposed by the White House. Beijing also issued warnings for citizens considering travel or studying in the US a sign that China wants to put pressure on America's tourism and education sectors and the European Union. Member states approved earlier today an initial list of U.S. goods that will be subject to tariffs to match the value of U.S. steel and aluminum tariffs that went into effect last month. Goods including soybeans and orange juice are in the EU's firing line, though American whiskey has been taken off the list. Coming up, changing tariff rates aside, how does the US Actually collect levies? That's after the break.

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[Alex Osola]

Starting at 12:01 this morning, President Trump's retaliatory tariffs went into effect. Yes, he effectively dropped most of them to 10% this afternoon, though the tariffs on goods from China are even higher now than they were this morning. No matter whether they stay this way, more tariffs makes the actual process of calculating and paying for them much more complicated. Liz Young, who covers logistics and supply chains for the Journal, joins us now. Liz, how will this all work?

[Liz Young]

So the tariffs taking effect just after midnight today means that any shipments that left the country of origin after that point will be eligible for these tariffs. So goods that were already on a ship, already on the water, already on their way to the US Will be exempted from these new tariffs. You know, if a shipment's being delivered by air, it'll be a little faster, but certainly it'll take days or weeks for these tariffs to really fully come into effect.

[Alex Osola]

How are the new tariffs making the importing process more complicated?

[Liz Young]

It's more complicated because now companies that may not have traditionally had to pay tariffs or that may have paid quite minimal tariffs are having to go through their books again. Work with these licensed customs brokers and figure out what is the actual duty rate we need to be prepared to pay. How do we pay it? They have to calculate those levies themselves and then make payment. So they are responsible for making sure that it's the correct amount. This isn't a case where the US Sends them a bill and they pay it online. It's a little more complicated than that. Companies that may have only previously had to calculate one duty rate may now have to calculate three or four or more. So items that contain steel, for example, they might have a separate line item based on how much steel is in that item and then the country they come from. If it's China, for example, it would have several other duties on top of that. So this is making a process that might have previously been, you know, let's say 10% for any item imported is now several line items that they have to go through and calculate.

[Alex Osola]

How are companies contending with this?

[Liz Young]

Companies are grappling with this largely by relying on licensed customs brokers. Customs brokers specialize in this. They have to set up their systems, too. So it's been something where they have to kind of race to get ready for this. But they are skilled and ready to help with the importing paperwork, help with calculating the duty rate, help with facilitating payment. And most companies rely on those brokers to help them navigate this.

[Alex Osola]

That was WSJ reporter Liz Young. Thanks so much, Liz.

[Liz Young]

Thank you.

[Alex Osola]

And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Biennime and Anthony Banci, with supervising producer Michael Cosmitis. I'm Alex Osala for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.