President Trump’s surprise decision to pause most of the sweeping tariffs he recently announced while keeping a hefty 125 percent tariff in place on Chinese goods marked a significant shift in tone that brought a wave of relief to both Wall Street and Capitol Hill. The move, seen as a partial retreat from an all-out trade war, reversed some of the market panic triggered by the earlier announcement of broad tariffs.
The stock market soared in response. The Dow Jones Industrial Average jumped by 2,962 points, a gain of nearly 8 percent. The S&P 500 rose 9.5 percent, and the Nasdaq surged more than 12 percent signaling investor confidence in the tariff pause as a cooling factor on what had become growing fears of an economic slowdown.
Markets weren’t the only ones breathing easier. Republican lawmakers, many of whom had quietly voiced concern over the economic consequences of the escalating tariffs, expressed relief. Senator Mike Rounds of South Dakota said the market itself was sending a clear message: “They want to see progress made. The president acknowledging that is a positive step.”
Trump acknowledged that economic signals particularly from the bond market influenced his decision. “People were jumping out of line, getting a little afraid,” he said, noting he had been closely watching market behavior and interest rates. “The bond market is very tricky, I was watching it. But if you look at it now, it’s beautiful.”
Treasury Secretary Scott Bessent also noted the pressure from more than 75 countries seeking to negotiate tariff relief. He emphasized that the trade war with China was different, calling Beijing “the most unbalanced economy in the history of the modern world.”
Still, while tariffs on most countries were paused for 90 days, Trump doubled down on China, increasing the rate from 104 percent to 125 percent. This selective approach left trade experts questioning how much relief would actually reach American consumers, since tariffs on Chinese imports are still expected to raise prices on key goods.
Trump called the pause a strategic move, saying, “It’s not a negotiation until it is,” and emphasized the need for flexibility. He hinted at the coming shift earlier in the day on Truth Social, writing: “THIS IS A GREAT TIME TO BUY!!!”
Senate Republicans, including Ron Johnson of Wisconsin and Ted Cruz of Texas, welcomed the decision. Cruz praised the administration’s focus on China, calling it “very good for U.S. economic and national security.”
Wall Street figures also weighed in. Hedge fund manager Bill Ackman who had publicly called for a tariff pause celebrated the decision and credited the president’s deal-making instinct. “This was brilliantly executed,” Ackman wrote online.
But not everyone is convinced the pause will deliver long-term benefits. BlackRock CEO Larry Fink warned that the economy is already weakening, and JPMorgan Chase CEO Jamie Dimon said a recession may still be likely. Some experts argued that while the move may ease market jitters in the short term, the overall tariff burden on the U.S. remains high and the average American may not see much relief.
Economists like Gregory Daco from EY and Ernie Tedeschi, a former White House adviser, said the pause simply redistributes the pressure, shifting the focus more squarely onto China without significantly reducing the overall tariff load.
Despite the celebratory headlines and temporary bounce in the markets, the real test of Trump’s trade strategy may still lie ahead especially if the 90-day window closes without meaningful deals and tariffs return in full force.