After 'liberation day' blockbuster, Trump's sequel is a box office hit

After 'liberation day' blockbuster, Trump's sequel is a box office hit
Investors give it five stars, but Chinese audiences are not impressed
APR 10, 2025

We’ve seen a week of dramatic action since that scene in The Rose Garden when Donald Trump unveiled widespread tariffs, but nobody expected a sequel so soon.

As markets have tumbled day after day, with the president sticking to the script of tough talk, especially on China, the markets were weighing the potential impact over months, perhaps years.

But when Trump paused almost all of the reciprocal tariffs at 10% Wednesday, except for those countries that have retaliated in the last week, US stocks jumped the most since March 2020 and short-term Treasuries dropped.

European and Asian markets have gained so far Thursday following the near 10% gain on Wall Street in the previous session, but US futures are down 2% as of 5am ET as the markets assess the damage that’s already been done by the trade war and the new uncertainty of what will happen after 90 days – or perhaps sooner.

For global leaders, a 90-day pause on the levies that were just starting to punish their trade with the US is a welcome plot twist, but as with all the best dramas we’re left with many unanswered questions and are forced to wait for the next instalment, likely when trade negotiations progress.  

Michael Arone, chief investment strategist, US SPDR Business, State Street Global Advisors, said that the tariffs were not sustainable and the Trump administration has finally admitted it.

“Investors got their first bit of good news since last Wednesday. Investors cheered the decision with a massive stock market rally,” he told InvestmentNews. “[The] trade announcement further isolates China as enemy #1 in Trump’s Trade War and market participants are fine with that – they have seen that movie before. Investors went racing back into the comfortable arms of reliable high growth tech companies like the Mag-7.”

Arone says that investors should prepare for more market volatility in the weeks and months ahead: “The Trade War may not be over but at least for today investors have won the battle.”

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