U.S. President Donald Trump has announced a temporary 90-day suspension on so-called “reciprocal tariffs,” reducing the tariff rate to 10% for countries that refrain from imposing retaliatory duties against the United States.
Despite this easing, Trump declared that tariffs on China would rise sharply to 125%, citing Beijing’s decision to implement countermeasures. In a post on Truth Social dated April 9, Trump stated:
“Hopefully, it won’t be long before China understands that exploiting the U.S. and other nations can no longer be tolerated.”
Following the announcement, the S&P 500 surged nearly 7%, according to TradingView data, reflecting the market’s sensitivity to global trade policy developments and the lingering risk of an extended economic standoff.
Markets React Sharply to Shifting Trade Signals
Financial markets are in a heightened state of turbulence, with asset prices swinging widely in reaction to President Trump’s ongoing tariff policy shifts.
Billions in equity value were erased in the days after Trump signed off on the reciprocal tariff framework. However, each sign of a potential rollback or pause has triggered strong recoveries in market sentiment.
On April 7, unconfirmed social media reports suggested Trump was weighing a temporary halt to the tariffs. This sparked a $2 trillion rally in U.S. stocks as optimism took hold.
The Volatility Index (VIX), which tracks expected price fluctuations in the S&P 500, spiked to over 60 on April 7 — a level not seen since the yen carry trade unwind in August 2024. Although it has since cooled to 37.5, the reading still indicates intense market instability.
Crypto May Benefit from Trade Tensions
Arthur Hayes, co-founder of BitMEX and a well-known market analyst, commented that China’s potential response — a yuan devaluation — could lead to increased interest in cryptocurrencies.
Hayes pointed to similar patterns in 2013 and 2015, when capital outflows from China surged and many investors sought refuge in digital assets amid growing economic uncertainty.
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