European markets opened higher on Thursday morning after US President Donald Trump announced that he would pause certain 'reciprocal' tariffs for 90 days, while simultaneously raising import levies on Chinese goods to 125% from 104%.
As of around 9:30am CEST, the Euro Stoxx 50 surged 7.5%, Germany’s DAX jumped 7.4%, and the FTSE 100 advanced 5.1%.
The surge mirrors a historic rally on Wall Street and a rise in Asian markets.
Japan’s Nikkei 225 soared 9.1%, South Korea’s Kospi rose 6.6%, Australia’s ASX 200 advanced 4.5%, and China’s Hang Seng Index added 2.2%.
Investors found temporary relief after a week of intense sell-offs across global equities. However, the sustainability of the rally remains in doubt, given the unpredictability of Trump’s tariff strategy and the ongoing escalation of the US–China trade conflict.
Trump increased tariffs on China following Beijing’s announcement of 84% retaliatory duties on US goods.
“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,” the president posted on social media.
He also reiterated that China would eventually come to the negotiating table: “We’ll get a phone call at some point, and it’ll be off to the races.”
Bloomberg reported that senior Chinese officials are expected to meet on Thursday to discuss further stimulus measures. Sources told journalists that the meeting would focus on tools to support housing, consumer spending, and tech innovation in the face of Trump's tariffs.
Earlier in the day, China’s National Bureau of Statistics reported that consumer prices fell by 0.1% year-on-year in March, marking the second consecutive month of contraction and underscoring the country’s ongoing sluggish domestic demand.
Trump’s tariff flip-flopping
Just one day earlier, Trump had denied rumours of a tariff pause, stating: “We’re not looking at that.”
Hours before announcing the delay, he posted on Truth Social: “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”—a message posted as markets were plunging.
Following the temporary suspension of new tariffs on dozens of nations, Trump told reporters at the White House: “I thought that people were jumping a little bit out of line.”
He added: “They were getting a little bit yippy, a little bit afraid.”
His remarks appeared to contradict comments made by Treasury Secretary Scott Bessent last month, who said he was unconcerned about the market’s reaction.
US stock markets staged their best single-day rally since 2001 during the dot-com bust on Wednesday. The tech-heavy Nasdaq surged more than 12%—a gain only seen during major crises such as the 2008 Global Financial Crisis and the 2020 pandemic. The S&P 500 climbed nearly 9.5%, while the Dow Jones Industrial Average rose almost 8%.
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“We’re having a good day in the stock market, as you can see—an all-time, record day—and hopefully it continues,” Trump said at the White House on Wednesday.
US government bonds also rebounded after having been heavily sold off on Monday and Tuesday. The bond market rout may have raised significant concerns within the Trump administration, as investors may have been forced to liquidate positions to cover equity losses while losing confidence in traditional haven assets. “The bond market is very tricky,” Trump commented. “I was watching it. But if you look at it now, it’s beautiful—the bond market right now. But I saw last night where people were getting a little queasy.” The yield on the US 30-year Treasury had soared nearly 70 basis points over the previous two sessions, reflecting rapidly worsening economic expectations.
“The show is not over. But for the markets—which, in the absence of a total rescission of the trade policy, were at least looking for signs that the US is open to granting concessions and providing some policy certainty—this was as good an excuse as any to buy the dip and price in a better-than-worst-case scenario,” Kyle Rodda, senior market analyst at Capital.com Australia, said.
