Whiplash: Markets Rally as Trump’s Tariff Strategy Becomes Clear
What looked like the start of a global financial panic turned into a show of strength from the White House and a stunning rally on Wall Street.
Stocks soared Wednesday after President Donald Trump paused tariff hikes on dozens of U.S. trade partners while slapping China with a punishing 125 percent tariff. The market didn’t crash. It launched.
The Dow jumped 6.98 percent, the S&P 500 shot up 8.19 percent, and the Nasdaq exploded 10.34 percent—one of the best days for equities in a decade.
This wasn’t retreat. It was redirection. The president pulled off a flash launch, turning a tariff-induced selloff into a strategic masterstroke.
The Pause That Roared
At 1:25 p.m., the president posted what amounted to a geopolitical turning point:
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
The pause applies to dozens of countries that Trump says “have not, at my strong suggestion, retaliated in any way, shape, or form.” The 10 percent baseline rate remains in place, but the higher duties announced last week are on hold for 90 days.
And while the door opened for negotiation, the hammer came down on Beijing.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff… to 125%, effective immediately,” Trump wrote.
Less than 13 hours after new reciprocal duties went live, the president recast the entire framework: allies get breathing room, China gets the boot.
This is a confirmation of what Breitbart Business Digest has been explaining for months: the purpose of the reciprocal tariffs is to bring countries with trade surpluses with the U.S. to the negotiating table. That’s working.
Bessent Is the Herald of the Trump Trade Doctrine
Treasury Secretary Scott Bessent, who’s spent the past two months laying the intellectual groundwork for the Trump trade doctrine of enlightened economic nationalism, said the shift is not surrender—it’s leverage.
“The president created maximum negotiating leverage for himself,” Bessent told reporters, confirming he’s in talks with officials from Vietnam, Japan, India, and South Korea.
Earlier in the day, at a convention of bankers, he described China’s model as a magical mop gone rogue: “They keep producing and producing, and dumping and dumping,” invoking the enchanted brooms from Disney’s Fantasia.
And while China escalates, others are lining up. “They’ve been good military allies, not perfect economic allies,” Bessent said. “But we can probably reach a deal… and then approach China as a group.”
The Bond Market Embraces Enlightened Economic Nationalism
Wednesday morning looked grim. The 10-year yield had jumped to 4.51 percent, and some analysts were bracing for a failed bond auction or worse. Former Treasury Secretary Larry Summers warned that Trump’s tariffs might spark a “serious financial crisis.”
They were wrong.
The Treasury’s $39 billion auction came off like a moon landing. Yields fell, prices surged, and foreign buyers snapped up nearly 88 percent of their share—an emphatic rejection of the “sell America” thesis.
“There is nothing systemic about this,” Bessent had said that morning on Fox Business. “This is just deleveraging. It happens every few years.”
Right again.
Flash Launch > Flash Crash
What started as a textbook panic ended in one of the fastest, sharpest turnarounds in modern market history.
Tariffs weren’t reversed. They were refocused—hammering China harder while inviting the rest of the world to deal. Markets didn’t collapse. They rallied to the logic of American leadership.
A week ago, the smart money said Trump had overreached. Some were saying that we were driving the world away from alliance with the U.S. and into the arms of China. Today, they’re chasing the rally he triggered.
The flash crash of last week has become the flash launch. And it was Donald Trump and his economic team who built the rocket.
