Tariff pause a relief to markets

US PRESIDENT Donald Trump’s stunning decision to pause most of the hefty duties he had just imposed on dozens of countries brought relief for battered global stock markets yesterday, even as e ratcheted up a trade war with China.

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Trump’ turnabout, which came less than 24 hours after steep new tariffs kicked in on most trading partners, followed the most intense episode of financial market volatility since the early days of the Covid-19 pandemic.

The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields that appeared to catch Trumps attention.

“I thought that people were jumping a little bit out of line, they were getting yippy, you know,’ Trump told reporters after the announcement, referring to the jitters sportspeople sometimes get.

US stock indexes shot higher on the news, with the benchmark S&P 500 closing 9.5% higher, and the relief continued into Asian trading yesterday with Japan’s Nikkei index surging 9%.

European futures also pointed to big gains, but there were already signs the rally may be short-lived with US stock futures trading lower. Oil prices also fell, extending losses fuelled by fears that the trade tensions could push the global economy towards recession.

Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives.