Trump's 90-Day Tariff Pause Boosts Market Optimism, China Faces 125% Tariffs

President Donald Trump announced a significant shift in his trade policy, implementing a 90-day pause on reciprocal tariffs for nearly all U.S. trade partners, with the exception of China. This move saw tariffs on imports from most countries reduced to 10%, while China faced an increase to 125%. The decision came as a response to the escalating trade tensions and their potential impact on the global economy.

The announcement led to a surge in market optimism, as investors welcomed the temporary relief from the tariff war. The pause in tariffs was seen as a step towards easing trade tensions, which had been a significant source of uncertainty for businesses and markets worldwide. The reduction in tariffs for most countries was expected to provide some breathing room for economies that had been grappling with the punishing effects of the trade war.

Analysts had previously forecasted a higher probability of a recession due to the escalating trade tensions. However, with the announcement of the 90-day pause, some analysts revised their predictions. The pause was seen as a positive development that could potentially mitigate the economic risks associated with the trade war. The reduction in tariffs was expected to provide some relief to businesses and consumers, who had been bearing the brunt of the tariff increases.

The decision to raise tariffs on China to 125% was seen as a targeted measure aimed at addressing specific trade issues with the country. The move was expected to put pressure on China to negotiate more favorable trade terms with the U.S. The increase in tariffs on China was seen as a strategic move to leverage the country's economic dependence on the U.S. market.

The 90-day pause in tariffs was seen as a temporary measure, with the potential for further negotiations and adjustments in the future. The decision was expected to provide some stability to the global economy, which had been facing significant headwinds due to the trade war. The pause in tariffs was seen as a positive development that could potentially pave the way for a more constructive dialogue between the U.S. and its trade partners.

According to the analyst's forecast, the odds of a recession in the U.S. are still high because the President has already done a lot of damage and he’s offering no more than a partial fix. The tariff pause reduces recession fears, but it’s still very risky. The market rebound marks a stunning reversal of the past week’s rout, which President Trump set into motion with the unveiling of his aggressive tariff regime.