Associated Press, by Josh Boak
WASHINGTON (AP) – Faced with a global market meltdown, President Donald Trump suddenly backed most countries’ tariffs for 90 days on Wednesday, even if he raises the tax rate on China’s imports to another 125%.
It appears to have been trying to narrow what was an unprecedented trade war between the United States and most of the world into a showdown between the United States and China. The S&P 500 stock index rose 9.5% after its release, but Trump’s drama over tariffs is far from the end as the administration prepares to engage in national negotiations. In the meantime, countries subject to suspension are currently involved with 10%.
The president paused in the face of intense pressure created by the volatile financial markets that had pushed Trump to reconsider his tariffs, even if some executives argued that his reversal was always a plan.
As stocks and bonds were sold, voters saw retirement savings drop and companies warn of worse sales and price increases than expected.
The global economy appeared to be in a public uprising against Trump’s tariffs, which took effect early on Wednesday. By the early afternoon, Trump had posted to the Society of Truth. This was because over 75 countries had contacted the US government for trade consultations and had not retaliated in any meaningful way, and “I have allowed a 90-day suspension, with 10%, which had fallen significantly during this period, quickly becoming effective.”
Trump later told reporters that he pulled back many global tariffs as people were “Yippy” and “fearing” because of the decline in stock markets, but it wasn’t China. He expected to reach the deal, but added, “Nothing has finished yet.”
The president said people were “a bit sick” as he monitored the bond market, with bond prices falling and interest rates rising due to investors’ votes on previous tariff plans.
“The bond market needs to be very careful,” Trump said. “I was watching it. But if you see it now, it’s beautiful.”
The president later said he had been thinking about suspending his tariffs over the past few days, but he said it was “early this morning, and pretty early with me.”
Asked why White House aides had been insisting that tariffs weren’t part of the negotiations for weeks, Trump said: “In many cases, that’s not a negotiation until it does.”
The 10% tariff was the baseline rate of most countries that came into effect on Saturday. It’s significantly lower than the 20% tariffs Trump set for goods from the European Union, 24% of imports from Japan and 25% of products from South Korea. Still, 10% represents an increase in tariffs previously charged by the US government. Canada and Mexico will continue to receive 25% tariffs due to independent directives to stop Trump’s smuggling of fentanyl.
Treasury Secretary Scott Bessent said negotiations with individual countries will be “custom-to-order.” This means the next 90 days will involve consultations on a surge in potential transactions. Former hedge fund manager Bescent told reporters that the statement, which was later contradicted by the president, said the suspension was because other countries were seeking consultations.
“We assume that the only certainty we can offer is that the United States will negotiate in good faith, and that will happen to our allies and our allies,” Bescent said.
The Treasury Secretary said he and Trump “we spoke a long story on Sunday, this is his strategy forever,” and the president “put China in a bad position.”
Before the reversal, executives had warned of the potential recession caused by his policies. Some of the top US trading partners have retaliated with their own import taxes, and the stock market has been shaking a few days later.
White House Press Secretary Caroline Leavitt said the walk was part of Trump’s negotiation strategy.
She said the news media clearly didn’t see what President Trump is doing here. You tried to say that the rest of the world would approach China.
World Trade Organization Head Ngozi Okonjo-Iweala said the US-China trade war “can seriously undermine the global economic outlook” and warned of “potential fragmentation of world trade along geopolitical boundaries.”
The market turmoil had been built for several weeks prior to Trump’s move, but the president has sometimes suggested that import taxes would remain, and at the same time they could be subject to negotiations.
What’s particularly concerning was that US government debt had lost some of its luster with investors. Government bond prices have been falling, raising the US Treasury interest rate to 4.45% in 2010. That rate was eased after Trump’s reversal.
Gennadiy Goldberg, TD Securities’ US principal rate strategy, said before the announcement that the market wanted to see a ceasefire in the trade dispute.
“The Treasury market, not just the broader market, is looking for signs of trade removal coming,” he said. “Without escalation, it would be difficult for the market to stabilize.”
John Canavan, a lead analyst at consultant Oxford Economics, said Trump changed courses due to possible negotiations, but he previously indicated that tariffs would remain.
“There was a very complicated message about whether there would be negotiations or not,” Canavan said. “Given what’s going on in the market, he realized that the safest thing to do is negotiate and pause things.”
Wednesday’s flagellated nature could be seen in a social media post from hedge fund billionaire and Trump supporter Bill Ackman.
“Our stock market is declining,” Ackman posted on X.
Ackman repeated in search of a 90-day hiatus on the post. When Trump accepted the idea hours later, Ebullient Ackman posted that Trump had “stellarly carried out” his plan.
Because time in the White House is subject to financial and geopolitical forces beyond direct control, presidents often receive excessive credit or responsibility for the state of the US economy.
However, by imposing tariffs on unilaterally, Trump has had an extraordinary impact on commercial flows, creating political risks, and has led the market in different directions based on his remarks and social media posts. There are still 25% tariffs on automobiles, steel and aluminum, and there are more imports, including pharmaceuticals, and are set to receive tariffs in the coming weeks.
Tariffs in recent weeks have hit businesses and individuals alike.
On CNBC, Delta Air Lines CEO Ed Bastian said the administration is less strategic than Trump’s first term. His company had predicted it would have the highest financial year in history in January, but it simply abolished 2025 expectations due to economic uncertainty.
“When I tried to do it all at the same time, it created confusion in that I could make plans,” he said.
Before Trump’s turnaround, economic forecasters said his second term had a series of negative and cascade-related effects that could put the country in a recession.
Joe Brusseras, Chief Economist at Consultant RSM, said:
Bessent previously said it could take several months to launch a deal with the country regarding tariff rates. But in a Wednesday morning appearance on “Morning with Maria,” Bescent said at the “not too distant future,” the economy “will fire with every cylinder.”
He said there was a “overwhelming” response from a country that “want to sit at the table rather than escalate.” Bescent mentioned Japan, Korea and India. “They will find themselves all in China. Vietnam is here today,” he said.
Original issue: April 9, 2025, 12:09pm EDT
