P.M. Edition for April 9. U.S. stocks stage a furious rally after Trump announces a 90-day pause on reciprocal tariffs. WSJ investing columnist Spencer Jakab discusses the market reaction, and markets reporter Ryan Dezember breaks down what the tariff pause means in practice, as China was a big exception to the pause, with Trump saying the tariff rate on Chinese goods was now 125%. And, no matter what the tariff rate is, putting new levies into practice will make the act of importing much more complicated. Liz Young, who covers logistics and the supply chain for the Journal, walks us through how it works. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What caused the U.S. market rally?
U.S. markets rally after President Trump announces a 90-day pause on most retaliatory tariffs.
People were jumping a little bit out of line. They were getting yippy, you know. They were getting a little bit yippy, a little bit afraid.
But Trump escalates the trade war with China, raising its tariff rate to 125%.
while sort of lost maybe in the rejoice of the concessions and the pause that Trump has made this afternoon, that's still to come and to play out. And we're going to see a lot of businesses hurt by this.
Chapter 2: How does the pause on tariffs affect businesses?
And no matter what the rate is, new tariffs make the process of importing goods way more complicated. It's Wednesday, April 9th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.
President Trump said this afternoon that he has authorized a 90-day pause on reciprocal tariffs for all trading partners except China, sparking a broad-based market rally due to the temporary reprieve from the trade war. On his Truth Social platform, the president said that reciprocal tariffs will also be lowered to 10 percent, effective immediately.
Chapter 3: What are the implications of a 125% tariff on China?
That won't be the case for China, he said, which now faces a 125 percent tariff. Trump said his decision to pause the tariffs was based on the fact that more than 75 countries have engaged with representatives of his administration to open negotiations regarding trade, trade barriers, tariffs, currency manipulation and other matters.
The president excluded China from the 90-day pause, saying in his post that the world's second largest economy had shown a lack of respect throughout the tariff skirmish and would now face even loftier levies. At a news conference after the announcement, Treasury Secretary Scott Besant was asked by reporters why President Trump chose to pause these tariffs now.
President Trump created maximum negotiating leverage for himself. And which tariffs went into effect 15 hours ago? The ones that we have lowered went into effect a week ago. They were announced a week ago, and we have just been overwhelmed, overwhelmed by the response from mostly our allies who want to come and negotiate in good faith. So we are expecting them to come with their best deal.
As I said a week ago today, don't retaliate. Hold your ground. Let's see what happens. And China, they kept escalating and escalating, and now they have 125% tariffs that will be effective immediately.
Ryan Dezember, who covers markets for the journal, told me that while markets are celebrating, what it means in practice remains to be seen.
Wall Street's sort of still figuring it out. A lot of analysts and investors seem to be operating under the impression that the 10% tariffs blanket are still on. Tariffs on specific items and sectors like autos and steel are still on. But that those big... 50% and 40% on every country you can think of, that those are on pause.
And really, the market, what we're seeing is it seems to be celebrating the fact that there's maybe a pain threshold or a willingness to back down on some of these, to negotiate. Of course, this still leaves a huge escalation in the trade war with China. And that, while sort of lost maybe in the rejoice of the concessions and the pause that Trump has made this afternoon,
That's still to come and to play out. And I would expect that we're going to see a lot of businesses hurt by this. Next month's jobs report is going to be really enlightening in terms of small businesses and importers and how they're faring and whether they're able to keep their staffing at such a high level as it's been for a few years.
The market, once we get past this sort of overall celebration, will start to look at individual companies and parse the winners and losers. They'll start to see which companies can't do without China.
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Chapter 4: How significant was the market's reaction to the tariff news?
We're down three point something percent since the Liberation Day announcement. We're down less than 10% from the peak. So we never actually closed in a bear market 20% from the peak. To be down 3.8%, that's fair. That's actually getting off very mildly. So when we resume trading, we could see more declines when people have time to think about it.
The sort of reaction that we saw today is exaggerated by how people are positioned because people got very, very defensive. And so when you have this kind of sudden reversal, this piece of news that's a bombshell like this, the announcement that tariffs would be suspended for a while, it can elicit a reaction that's in excess of the economic benefit of the news itself.
When smoke clears tomorrow, not like we've had in the last few days, we might resume a downward trend because this all has been a hit to the economy, not just the tariffs themselves, but the chaos and the uncertainty surrounding the tariffs.
Chapter 5: What are the potential future impacts of these tariffs?
That was WSJ investing columnist Spencer Jacob. Thanks so much, Spencer.
Hey, thanks for having me.
President Trump's new batch of tariffs went into effect at midnight last night. Of course, the president's announcement of a 90-day pause on them this morning will change things for most nations. But already some governments had responded to the tariffs. This morning, China said it's raising its additional tariff on U.S.
goods from 34 percent to 84 percent, matching what was at the time the latest level imposed by the White House. Beijing also issued warnings for citizens considering travel or studying in the U.S., a sign that China wants to put pressure on America's tourism and education sectors. And the European Union member states approved earlier today an initial list of U.S.
goods that will be subject to tariffs to match the value of U.S. steel and aluminum tariffs that went into effect last month. Goods including soybeans and orange juice are in the EU's firing line, though American whiskey has been taken off the list. Coming up, changing tariff rates aside, how does the U.S. actually collect levies? That's after the break.
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Chapter 6: How are investors viewing the current market conditions?
Starting at 12.01 this morning, President Trump's retaliatory tariffs went into effect. Yes, he effectively dropped most of them to 10 percent this afternoon, though the tariffs on goods from China are even higher now than they were this morning. No matter whether they stay this way, more tariffs makes the actual process of calculating and paying for them much more complicated.
Liz Young, who covers logistics and supply chains for the journal, joins us now. Liz, how will this all work?
So the tariffs taking effect just after midnight today means that any shipments that left the country of origin after that point will be eligible for these tariffs. So goods that were already on a ship, already on the water, already on their way to the U.S. will be exempted from these new tariffs.
You know, if a shipment's being delivered by air, it'll be a little faster, but certainly it'll take days or weeks for these tariffs to really fully come into effect.
How are the new tariffs making the importing process more complicated?
It's more complicated because now companies that may not have traditionally had to pay tariffs or that may have paid quite minimal tariffs are having to go through their books again, work with these licensed customs brokers. and figure out what is the actual duty rate we need to be prepared to pay. How do we pay it? They have to calculate those levies themselves and then make payment.
So they are responsible for making sure that it's the correct amount. This isn't a case where the U.S. sends them a bill and they pay it online. It's a little more complicated than that. Companies that may have only previously had to calculate one duty rate may now have to calculate three or four or more.
So items that contain steel, for example, they might have a separate line item based on how much steel is in that item. And then the country they come from, if it's China, for example, it would have several other duties on top of that.
So this is making a process that might have previously been, you know, let's say 10% for any item imported is now several line items that they have to go through and calculate.
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