Tariff pause, markets jittery
A 90-day pause in U.S. tariff escalation briefly calmed markets but didn’t settle investor nerves. The S&P 500 flirted with a correction amid elevated volatility as traders treated the pause as an intermission rather than a resolution, and a key gauge of U.S. consumer sentiment slid to roughly its weakest reading in about 50 years — signs that trade policy is bleeding into real economic confidence. (webanditnews.com, webanditnews.com)
The White House’s 90-day tariff pause slowed one trade fight, but it did not calm investors or consumers by the end of the week. (whitehouse.gov) The pause came out of a May 12, 2025 U.S.-China agreement that suspended a 34% reciprocal tariff for 90 days while keeping a 10% tariff in place and leaving older duties untouched. The White House said other tariffs imposed before April 2, 2025, including Section 301 and Section 232 measures, would remain. (whitehouse.gov) That deal sat on top of a much broader tariff push that began with President Donald Trump’s April 2, 2025 executive order declaring trade deficits a national emergency and imposing “reciprocal” tariffs. The order said the administration was acting under the International Emergency Economic Powers Act and tied the move to manufacturing losses and supply-chain dependence. (whitehouse.gov) Markets treated the 90-day reprieve as temporary because the 10% baseline tariff stayed in place and the larger legal framework behind the tariffs did not change. The White House’s own fact sheet described the pause as a suspension, not a repeal, and said the two sides would keep talking through a new consultation mechanism. (whitehouse.gov) The economic unease showed up in household data as well as market pricing. The University of Michigan’s preliminary April 2026 survey put consumer sentiment at 47.6, down from 53.3 in March, while one-year inflation expectations rose to 3.8% from 3.4%. (sca.isr.umich.edu) Axios reported that the 47.6 reading would be a record low for the Michigan survey. Joanne Hsu, the survey’s director, said declines cut across age and political groups, with especially large drops among middle- and higher-income households with stock wealth. (axios.com, sca.isr.umich.edu) The Michigan release tied much of April’s deterioration to rising gasoline prices, volatile financial markets and the U.S. conflict with Iran, not tariffs alone. But it also showed how quickly trade, energy and market shocks can land in the same confidence data that investors watch for signs of slower spending. (sca.isr.umich.edu) The administration has argued the tariff strategy is reducing trade deficits and rebuilding domestic industry. In an April 2026 release marking one year since “Liberation Day,” the White House said the U.S. goods trade deficit with China had fallen 32% over the prior year and the deficit with the European Union had fallen nearly 40% from April 2025 through January 2026. (whitehouse.gov) Critics have focused on the uncertainty instead of the headline tariff rates. Michigan’s April survey showed consumers growing more pessimistic about short-run conditions and personal finances even before any final resolution on trade arrived. (sca.isr.umich.edu) That leaves the pause looking less like a settlement than a countdown. The tariffs that were suspended had an expiration date, the tariffs that remained never went away, and by April 2026 the public mood was still sliding. (whitehouse.gov, sca.isr.umich.edu)
