Markets across Europe experienced a significant surge at the beginning of trade today, following President Donald Trump’s decision to momentarily hold off on implementing extensive global tariffs that had recently unsettled markets. The Stoxx 600 index, featuring the most significant corporations in Europe, rose by 5.3% at 4:30 a.m. ET due to an uptick in all sectors, with the banking and industrial sectors that were severely impacted by recent market depreciations driving this surge.
Despite these gains, however, they still appear marginal when contrasted with the massive drops most significant indexes experienced when Trump first declared his intentions last week. His announcement stated he would introduce overarching tariffs on nearly all of America’s commerce partners, triggering significant concern.
Appearing to step back from his initial stance yesterday, Trump indicated he would momentarily lower newly imposed rates on imports to 10% for a duration of 90 days. As a result of this announcement, U.S. stocks saw a substantial spike, with the S&P 500 experiencing a massive 9% rise and marking one of its biggest single-day gains in recent history.
At the same time, both the Dow Jones Industrial Average and the Nasdaq Composite followed suit with the former increasing by 7.8% and the latter surging by 12% respectively, the latter experiencing one of the highest trading days ever. Today, investors will be focused on any further developments regarding China. Trump’s declaration of the temporary relief has not included China, and a vitriolic trade conflict remains.
The Interim President of South Korea emphasized the necessity for negotiation to get a reprieve from these tariffs, aligning with Trump’s pause on most charges on Wednesday. He insisted on marked progress in all trade discussions for the next 90 days to dodge these tariffs and called for increased effort in a Cabinet meeting earlier today.
The acting President further highlighted the onus upon an export-driven nation like South Korea. In his appeal to his Cabinet, he emphasized their commitment to ensuring the nation’s development and economic growth isn’t jeopardized. Trump, on Wednesday, announced a temporary 90-day hold on most tariff increases.
Opposing these new tariffs, China’s Minister of Commerce has confirmed that it will continue to employ reciprocal measures. According to China’s Ministry of Commerce, these U.S. tariffs are overlooking the long-standing benefits that the U.S. has garnered from international trade. In response, China has decided to adopt definitive countermeasures.
China asserted that it would see through its decision, should the U.S. decide to persist in its unique path. Notably, the new tariffs imposed by Trump on China remain unchanged, even while most tariffs applicable to other nations were suspended on Wednesday. These tariffs against China have now reached a cumulative rate of 125%.
On the other hand, Japan’s chief Cabinet Secretary announced today that Japan was relieved about Trump’s decision to suspend some of the threatened tariffs. However, he still voiced his government’s concerns and urged for a continuous review of these protectionist measures.
He lauded the recent decision by the U.S. government, considering this as an outcome of their repeated expressions of concern and pleas for the review of these actions. He further stressed that Japan would continue voicing its objections towards the U.S.’s reciprocal tariffs, as well as the levies on steel and aluminum products, including automobiles and auto parts.
China’s State Administration Council mentioned today that a 84% tariff against U.S. imports will be effective from 12:01 a.m. Thursday. In terms of imported goods shipped to China, those that have left before the tariff implementation time and will be received before the end of Sunday won’t be subjected to the tariff, as announced by China.
In bullish retaliation, China has imposed reciprocal tariffs against the U.S. This reaction came following Trump’s decision to impose additional duties on Wednesday. These new tariffs have led to a total duty of 125% on all Chinese imports by the U.S.