- U.S. stock indexes closed Friday up for the week but still down sharply since the April 2 tariff news.
- China upped the tariff ante on Friday, raising the levy on U.S. imports to 125%.
- President Trump says he's "optimistic" about a China trade deal, fueling a Friday stock rally.
This week ended much like it started, with U.S. and global markets in turmoil and fresh tariff threats and implementations leaving business owners and investors in a state of deep uncertainty.
Friday saw China countering in an ongoing game of tit-for-tat tariff moves, upping its trade levy on U.S.-sourced goods to 125% after President Donald Trump extended his tariff assessments on Chinese imports to 145%.
The Sino-American trade brawl has continued to play out following Trump’s abrupt reversal on sweeping reciprocal tariffs Wednesday, just hours after those new trade fees went into effect.
While the president declared a 90-day pause on dozens of country-specific levies, a separate 10% blanket tariff remains in place. The sole exception in Trump’s declared hiatus on reciprocal fees was China, which instead saw a tariff increase, originally communicated as a lift to 125% but later corrected at the higher rate.
Trump singled out China in his Truth Social posting announcing the tariff pause on Wednesday.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote.
Responding to questions from reporters at the White House following the president’s announcement, U.S. Treasury Secretary Scott Bessent suggested the pause was part of the president’s strategy all along.
“This was driven by the president’s strategy,” Bessent said. “He and I had a long talk on Sunday, and this was his strategy all along. You might even say he goaded China into a bad position. They responded. They have shown themselves to the world to be the bad actor.”
Tariff roller coaster roils investment markets
The teeter-totter policy effect has spilled into U.S. stock indexes, which rode steep declines late last week and into early this week, erasing trillions of dollars in value.
Trump’s Wednesday pause drove pricing up at, in some cases, record rates. Declines were back in play on Thursday and early Friday, but following White House comments indicating the president was “optimistic” about striking a deal with China and news that over a dozen new trade agreements had been reached, the Dow Jones, S&P 500 and Nasdaq Composite all moved into positive territory and finished the regular trading day up 1.6%, 1.8% and 2.1%, respectively.
While the three major indexes were up overall for the week, they remain sharply down since April 2, the day Trump unveiled his reciprocal tariff plan. And market watchers say the partial recovery isn’t a sign that investor uncertainty has been quelled.
“We remain in the early innings of this global trade regime change, and while the 90-day pause on reciprocal tariffs temporarily reversed the market selloff, it does prolong uncertainty,” Wells Fargo Investment Institute President Darrell Cronk wrote in a note on Friday, per CNBC.
Here’s where U.S. tariffs stand for the moment:
- China tariffs are at 145%, following a series of increases.
- Tariffs of 25% are in place on steel and aluminum imports, imported automobiles and goods from Canada and Mexico not covered by the United States-Mexico-Canada Agreement.
- Imports from all other countries are subject to a 10% trade levy.
EU matches Trump reprieve on retaliatory measure
The European Union followed up with its own 90-day pause on Thursday, halting actions approved earlier in the week to institute a raft of new tariff measures in response to Trump’s sector levies on steel, aluminum and automobiles.
“The EU considers U.S. tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The EU has stated its clear preference to find negotiated outcomes with the U.S., which would be balanced and mutually beneficial,” the European Commission said in a Wednesday statement.
On Thursday, European Commission President Ursula von der Leyen said member countries wanted to create space for trade negotiations with the U.S. but were prepared to reinstitute the new measures if deals can’t be reached.
“We took note of the announcement by President Trump. We want to give negotiations a chance,” von der Leyen wrote in a posting to X on Thursday. “If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.”