Details are emerging on U.S. President Donald Trump’s 90-day tariff pause that has stocks staging their biggest one-day rally in five years.
On social media, Trump said that he is pausing for 90 days the full effect of his reciprocal tariffs on most countries and moving to implement a lower import duty of 10% on most foreign products entering the U.S., which the president called a “universal rate.”
However, rather than lower the tariffs on China, America’s largest trading partner, Trump doubled down, announcing that he is raising the tariffs imposed on imports from China to 125% “effective immediately.” On social media, Trump wrote: “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.”
Trade War?
Also on social media, President Trump said he was pausing and lowering tariff rates because “more than 75 countries” have contacted U.S. officials “to negotiate a solution” to trade concerns that he raised in imposing the new import duties. U.S. Commerce Secretary Howard Lutnick said on social media that “the world is ready to work with President Trump to fix global trade.”
The de-escalation of Trump’s tariffs is being cheered by investors and sending all three of the major U.S. indices skyrocketing, with the Nasdaq Composite index up 10% in afternoon trading on April 9. However, the higher duties imposed on China raises the chances of a major trade war between the world’s two biggest economies, a development that could tip the global economy into a recession, say analysts.
Is the Vanguard S&P 500 ETF a Buy?
The Vanguard S&P 500 ETF (VOO) which tracks the movements of the benchmark U.S. stock index, has a consensus Moderate Buy rating among 506 Wall Street analysts. That rating is based on 409 Buy, 89 Hold, and eight Sell recommendations made in the last three months. The average VOO price target of $639.90 implies 31.59% upside from current levels.
