Senator Adam Schiff (D-CA) has called for a congressional investigation into potential insider trading and market manipulation by President Donald Trump following his abrupt announcement of a 90-day pause on most retaliatory tariffs. The pause maintains a 10% global tariff and ups tariffs on China to 125%, sending stock markets on a positive trajectory.
The S&P 500 rose significantly—by over 6%—and other indices like the Nasdaq Composite and Dow Jones also saw substantial gains (8% and 5%, respectively).
The move was preceded by a Truth Social post by President Trump, stating, “THIS IS A GREAT TIME TO BUY!!!” This statement came shortly after the markets opened and preceded a significant surge in stock prices following the tariff announcement. The sudden shift in tariff policy, which had previously been characterized as unyielding, surprised both lawmakers and financial markets.
Schiff, speaking to reporters, expressed his determination to uncover whether individuals within the administration or those close to Trump profited from advance knowledge of the tariff decision.
“Family meme coins and all the rest of it are not beyond insider trading or enriching themselves. I hope to find out soon,” Schiff told TIME.
Insider trading involves using nonpublic, material information to gain an unfair advantage in stock transactions. Legal experts note that even indirect actions—such as tipping off others or making suggestive public statements—can fall under scrutiny if they lead to financial gains based on privileged knowledge. Schiff’s concerns were echoed by other lawmakers, including Senator Tim Kaine (D-VA), who remarked that widespread skepticism about the situation has permeated Capitol Hill.
“The chaos he’s injecting in the economy is horrible,” Kaine adds. “Right now, he’s put tariffs on nations who have trade surpluses, tariffs on nations that have no trade barriers at all with the United States. It’s just a nonsensical policy.”
In his first 80 days of Trump’s second term, he has either placed tariffs on countries or certain products or rescinded those actions at least five times.
Alongside projected higher prices for the American people and undermining trust in the market, Trump’s tariffs have created uncertainty for businesses, increased input costs for manufacturers, jeopardized millions of jobs across industries reliant on global supply chains and contributed to rising inflation.
The newly imposed 125% tariff on Chinese imports is projected to have far-reaching consequences for both the U.S. and global economies. The tariff is expected to significantly raise the cost of goods imported from China, which accounts for a substantial share of consumer products in the U.S. Industries such as electronics, textiles, furniture, and toys.
Consumer electronics, like smartphones, could see price hikes exceeding 50%, with some products (e.g., iPhones) potentially costing over $2,000. Clothing prices are likely to rise sharply, as approximately 30% of U.S. textiles are sourced from China. Everyday items such as furniture, lamps, and sports equipment—over 50% of which come from China—are also expected to see steep price increases. Ultimately, prices will depend on each companies’ pricing strategies.
Additionally, many U.S. manufacturers rely on Chinese components for their supply chains. The 125% tariff will increase production costs, forcing businesses to either absorb the costs or pass them on to consumers.
China’s retaliatory tariffs—now at 84% on U.S. goods—will severely impact American farmers, who export $24 billion in agricultural products to China annually. Reduced demand for key exports like soybeans, corn, and poultry could lead to significant financial losses for the agricultural sector.
The World Trade Organization (WTO) estimates that merchandise trade between the U.S. and China could decrease by up to 80%, with global trade volumes shrinking as a result. Economists warn that the escalating trade war between the world’s two largest economies could reduce global GDP by nearly 7%, increasing the likelihood of a global recession.
While Schiff is the first senator to publicly advocate for an investigation into this matter, he faces significant challenges in pursuing a formal inquiry. Congressional committees with jurisdiction over financial oversight are currently led by Republican lawmakers who have shown little inclination to confront the White House on this issue. Without bipartisan support, Schiff’s efforts may be limited to informal investigations using his office’s resources, which lack subpoena power.
Trump’s tariff pause comes amid growing economic uncertainty and fears of a looming recession. While the 90-day suspension has been welcomed by some as a step toward stabilizing trade relations, critics argue that it introduces further unpredictability into global markets. Economists have noted that such abrupt policy shifts can create opportunities for insider trading and undermine investor confidence.
