Schiff Demands Probe Into Trump’s Tariff Pause Timing

Senator Adam Schiff has called for a congressional investigation into whether President Donald Trump engaged in market manipulation or insider trading when he abruptly paused his controversial tariff policy, a move that triggered Wall Street’s biggest rally since 2008. The California Democrat’s demand for oversight comes as markets whipsawed Thursday, with the Dow Jones Industrial Average plunging over 1,000 points after investors learned China would face a higher-than-expected 145% cumulative tariff rate.

“I’m going to do my best to find out,” Schiff told TIME regarding his push for a formal inquiry. “Family meme coins and all the rest of it are not beyond insider trading or enriching themselves. I hope to find out soon.” The senator’s comments pointedly referenced Trump’s post on Truth Social declaring “THIS IS A GREAT TIME TO BUY!!!” shortly after markets opened Wednesday, along with the letters “DJT” – both his initials and the ticker symbol for his media company.

Market Manipulation Concerns

Arizona Senator Ruben Gallego joined Schiff in signing a letter sent to the White House Thursday requesting “an urgent inquiry into whether President Trump, his family, or other members of the administration engaged in insider trading or other illegal financial transactions” with advance knowledge of the tariff policy change. The letter specifically highlighted Tesla’s 18% stock surge following Trump’s announcement, noting CEO Elon Musk had publicly opposed the tariffs.

Trump’s sudden reversal came after a week of unprecedented market volatility that wiped out trillions in market value and pushed major indices near bear market territory. The S&P 500 had fallen to just above its bear market threshold Wednesday morning, while the 10-year Treasury yield briefly traded above 4.5% – factors some economists believe influenced the administration’s decision despite official denials.

“When my own barber asks me whether Donald Trump is selling short or doing this to try to make money for himself, it shows that a lot of people are pretty suspicious about what’s going on,” Senator Tim Kaine, a Virginia Democrat, told TIME, reflecting widespread public skepticism about the timing.

BREAKING: Senator Adam Schiff just announced he is formally opening an investigation to see if members of Donald Trump’s Administration illegally profited off of today’s stock market shenanigans. Retweet to make sure every American sees this. pic.twitter.com/NUysyqRs5u

— Democratic Wins Media (@DemocraticWins) April 9, 2025

Administration Pushback

Commerce Secretary Howard Lutnick forcefully rejected suggestions that market conditions prompted the policy shift. “Absolutely not,” he stated on CNBC’s “Fast Money” when asked if financial market selling influenced the tariff pause. Instead, Lutnick warned companies to reconsider their global supply chains: “If you do business in China, or with a country that basically is just a proxy China, then you’re going to have to deal with the fact that President Trump does not think we are being treated correctly.”

Treasury Secretary Scott Bessent, a former hedge fund manager, claimed the tariff pause was the “strategy all along” designed to create space for negotiations with allies. However, he acknowledged speaking extensively with Trump before the decision and admitted the move had helped “goad China into a bad position,” according to CNBC.

Markets Digest Conflicting Signals

Thursday’s market selloff came after the White House clarified that China would face a cumulative tariff rate of 145% – the new 125% duty plus an existing 20% levy related to the fentanyl crisis. The revelation accelerated losses in technology stocks particularly dependent on Chinese manufacturing, with Apple falling 4.2% amid analyst estimates that tariffs could increase iPhone 16 Pro Max prices by as much as $350.

Trump later suggested the 90-day pause could potentially be extended beyond July. “We’ll have to see what happens at that time,” he remarked during a Cabinet meeting. This uncertainty contributed to the CBOE Volatility Index (VIX) jumping back above 50 after briefly retreating the previous day.

Capital Economics chief economist Paul Ashworth suggested Trump had “folded on his tariff policy” under market pressure, particularly from the bond market. “Our working assumption now will be that, cowed by the market response, Trump will repeatedly extend the ‘pause,’ meaning this will end up looking a lot like the 10% universal tariff that he campaigned on,” Ashworth wrote to clients.

The European Union mirrored Trump’s approach Thursday, announcing it would halt retaliatory tariffs on U.S. products for 90 days. Meanwhile, Federal Reserve officials signaled increased concern about inflation risks from tariffs, with Kansas City Fed President Jeffrey Schmid stating he was “not willing to take any chances when it comes to maintaining the Fed’s credibility on inflation.”

As political and economic uncertainty continues, Schiff’s probe faces significant hurdles. Congressional investigations would typically fall under committees chaired by Republicans who have largely avoided conflict with the White House, leaving individual lawmakers like Schiff limited to investigations using personal office staff without subpoena power.