Trump Tariffs Take a Wild Turn: 125% China Hike Followed by Global 90-Day Pause—Did He Blink?
2min read In a dramatic afternoon post on Truth Social, President Donald Trump announced an immediate 125% tariff on all Chinese imports—while simultaneously backing off broader trade penalties by declaring a 90-day global tariff pause for over 75 allied nations.
“Based on the lack of respect that China has shown to the World’s Markets... I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump posted. “Conversely… I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff… of 10%, also effective immediately.”
Markets Soar on Surprise Pivot
Wall Street cheered the unexpected move. Despite the aggressive tone toward China, the softer stance toward U.S. allies triggered a massive rally across major indices around 1:30 PM ET:
- Dow Jones: +6%
- S&P 500: +6.8%
- Nasdaq: +8.53%
Investors interpreted the pause as a de-escalation—and possibly a signal that Trump is blinking under pressure.
Dan Ives: “Worst Policy Mistake Since Smoot-Hawley”
In a research note released Wednesday morning, Wedbush Securities Senior Analyst Dan Ives called last week’s tariff rollout “the worst U.S. policy mistake since Smoot-Hawley in 1930.”
“Enterprise hardware ordered by an IT product manager last month now just doubled in price,” Ives wrote. “This is a self-inflicted Armageddon scenario for the U.S. tech sector.”
According to Ives, the tariff shockwave has already frozen capital expenditures and delayed projects across the board, especially in tech, where supply chains are deeply rooted in Asia. His view: U.S. companies simply don’t have the infrastructure to pivot on a dime—and American consumers will end up footing the bill.
Ives updated his note to clients, responding to the tariff delay, "This was the news we and everyone on the Street was waiting for as the pressure on Trump took on a life of its own and the eye popping rise of the 10-year yield was ultimately too much to hold his line on the self-inflicted Armageddon tariff unleashed at midnight."
Is Trump Backing Off?
White House Press Secretary Karoline Leavitt said trading partners are not moving toward China but instead calling the United States to negotiate new trade deals. "The entire world is calling the United States of America, not China," Leavitt argued, "because they need our markets they need our consumers and they need" President Trump to talk to them.
Trump’s decision to carve out a wide-reaching 90-day reprieve for most countries seems aimed at containing the economic fallout. He noted that more than 75 nations have contacted U.S. trade agencies to negotiate around trade barriers, currency manipulation, and tariffs—and that none have retaliated.
Despite the rally, Ives warned investors to brace for continued volatility. He expects many tech firms—including apple and Nvidia—to avoid providing earnings guidance in the near term due to the unpredictability.
Still, Ives maintains Outperform ratings on both Apple and nvidia, citing their long-term leadership and resilient installed bases—even amid the chaos.
Bottom Line
Trump’s latest move signals both escalation and retreat: a hard punch at China, paired with an olive branch to the rest of the world. The market’s reaction shows investors are betting on a de-escalation narrative. But with global supply chains in flux and uncertainty still high, the next 90 days will be critical.
