Tesla stock surged by nearly 23% on Wednesday following the announcement that U.S. President Donald Trump had decided to pause new import tariffs for a period of 90 days. This news caused Tesla shares to close up at $272.20, marking a $50.34 increase per share. The stock continued to rise by 0.92% in after-hours trading.
The significant jump in Tesla’s stock price came after Trump revealed that most countries would now be subject to a reduced tariff rate of 10% while ongoing trade talks take place. This decision was made shortly after nearly 90 countries were hit with higher import tariffs as part of a new “reciprocal” policy.
However, Trump made it clear that tariffs on Chinese imports would see a substantial increase to 125% immediately. He justified this move by pointing to what he perceived as a “lack of respect” from China towards global markets. In response, China retaliated by raising its own tariffs on U.S. goods to 84%.
The temporary halt on tariffs seemed to have a calming effect on the markets, with the S&P 500 index experiencing a 7% increase, marking its largest one-day gain in five years and reversing recent losses.
During a press conference, Trump explained his decision by stating, “People were getting a little bit afraid. They were getting yippy.” He also mentioned that over 75 countries had reached out to U.S. officials following the introduction of tariffs the previous week.
Although Tesla shares are currently down by 28% year-to-date, they have seen a 54% increase over the past year. This surge in stock price reflects the positive response to the tariff pause and the potential impact of ongoing trade negotiations.
Overall, the market volatility surrounding tariffs and trade disputes continues to influence stock prices, with Tesla’s performance reflecting the broader economic landscape. Investors will be closely monitoring developments in trade talks and tariff policies to gauge the future trajectory of Tesla and other stocks affected by these factors.