Trump's Reversal of Tariffs Causes Market Impact

On April 23, 2025, U.S. stock markets soared after President Donald Trump announced major tariff cuts on China.

U.S. stock markets soared on April 23 following President Donald Trump’s announcement of major cuts to tariffs on China. The move, which follows weeks of strained relations between the two economic superpowers, saw the Dow Jones Industrial Average rise by an impressive one thousand points.

The gains across the major indexes were broad based, with the S&P 500 and the Nasdaq Composite both increasing by 3%. This signaled a return of investor confidence after a turbulent period.

The sunny economic picture came after U.S. relations with China had been uneasy for weeks before the cuts to U.S. tariffs. Trump said the tensions that had unsettled global markets were now cooling, while tariffs would decrease substantially. This policy shift also paused the “Sell America” trade narrative that had been gaining traction.

The cryptocurrency market, meanwhile, remained strong as Bitcoin broke through $93,000. According to the cryptocurrency exchange Binance, BTC was trading at $93,056 by 7:45 a.m. ET on April 23.

The cryptocurrency market has remained buoyant in recent days with major coins such as BTC and Ether showing strength. The gains come after a period of volatility in crypto prices that saw Bitcoin fall below $30,000 in April, before rebounding above $40,000.

The upbeat news on tariffs also helped to lift mood in the markets. A FactSet chart tracking U.S. stock indexes over three sessions showed that all major indexes were in positive territory by April 23.

The administration had previously announced plans to impose a 145% tariff on Chinese imports, a move that economists said would effectively end most U.S. China trade. The White House official confirmed the high rate of the tariff and fears of economic fallout were expressed by economists, who pointed to the potential for a steep rise in consumer prices and a setback for the fragile economic recovery.

The administration’s decision to lower tariffs came after a period of negotiation, during which business leaders had been pressing the government for relief from the effect of high tariffs on supply chains and consumer prices. The move also brought a reprieve for Federal Reserve Chair Jerome Powell, who had been subject to criticism during the market turbulence.

Earlier on April 16, Powell signaled the Federal Reserve’s patience as it navigates the economic landscape. He said the Fed will wait to assess the impact of Trump’s policies, including tariffs, before changing the rates.

The rollback of the tariff now alleviated immediate pressure on the Fed and allowed Powell to keep the central bank’s current posture.

Since Powell was appointed chairman of the Federal Reserve in 2018, Trump’s relationship with Powell has been marked by tension and a divergence of views.

With regard to interest rates, Trump has regularly voiced his disapproval of Powell’s actions and expressed a desire for lower rates to be set by the Fed chairman. In response to Powell’s refusal to lower interest rates on April 17, Trump said the Fed chairman was “playing politics.” He went on to threaten to dismiss Powell if he did not comply with his wishes.

For his part, Powell has stated categorically that he does not intend to leave the position earlier than the May 2026 that he is scheduled to retire from.

The tensions reached a peak as Trump called for lower interest rates to boost economic growth in an uncertain time of trade and the administration’s trade policies being subject to scrutiny.

While Trump’s administration had threatened to sharply increase tariffs on $250 billion worth of Chinese goods, the president suggested a different tone by April 22. He said he had no plans to fire Powell and acknowledged that the Fed had a role in keeping economic stability. In a time of market recovery, Trump appeared conscious of how the backlash could come if he disrupted the Fed’s independence.

The Fed’s autonomy in monetary policy, too, was also backed by bipartisan support, which further added to the support for Powell’s position.

On April 23, the stock market went up sharply and boosted investor sentiment, as the dual gain of tariff reduction and Trump’s softened stance on Powell was realized.

The broader economic context was also involved in this. Data from Nasdaq also shows that over the long term, Bitcoin has outperformed traditional assets such as gold and the S&P 500 with a return of 437,171 percent since 2011. This resilience in cryptocurrencies, along with the tariff news, encouraged investors to re enter equity markets.