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Donald Trump is bailing on his tariff agenda after less than a week.
The president said on Wednesday that he has authorized a “90 day PAUSE, and a substantially lowered Reciprocal Tariff” for countries who have not economically “retaliated in any way, shape, or form against the United States” and his tariff regime. One country that has retaliated is China, and Trump says he is hiking up tariff rates against China to a whopping 125 percent.
In a Truth Social post this afternoon, Trump wrote: “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”
Trump continued: “Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States … I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
The White House implied the pause was all part of the plan and a classic example of “the art of the deal.” Trump told reporters later on Wednesday that he made the move essentially because of how the markets were reacting. “I thought that people were jumping a little bit out of line,” he said. “They were getting yippy, they were getting a little bit afraid.” When Trump was asked if the cratering bond markets had anything to do with the decision, he said that the he was watching the market last night and “people were getting a little queasy.”
In short: Trump caved.
He promised America would be “liberated” as a result of the tariffs, but then balked before gaining the trade concessions his administration said were coming. Americans still figure to be hit with high prices, as a 10-percent baseline tariff on imports remains in place, and the tax on goods from China, the nation’s third-largest trade partner, is now astronomical. An immediate financial catastrophe may have been averted, but the economy is still in a concerning state of flux as Trump keeps reversing himself with no apparent plan for how to resolve any of this.
Trump’s announcement comes as market volatility surged in the week following his tariff announcement last Wednesday. Economists raised major red flags on Tuesday and Wednesday as the volatility seemed to bleed into treasury bonds and futures — a signal that major economic destabilization could be imminent. Nevertheless, Trump implored Americans to “BE COOL!” Wednesday morning, while assuring them, “NOW IS THE TIME TO BUY!!!”
Ahead of the announcement, reports emerged that Treasury Secretary Scott Bessent had canceled a meeting with House Republicans in order to attend to Trump at the White House. Commerce Secretary Howard Lutnick wrote on X that he and Bessent “sat with the President while he wrote one of the most extraordinary Truth posts of his Presidency. The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction.”
In a statement to reporters, Bessent said that Trump had executed a “successful negotiating strategy” that “brought more than 75 countries forward to negotiate.”
“It took great courage for him to stay the course until this moment,” Bessent added.
Trump told the audience at the annual National Republican Congressional Committee dinner on Tuesday that he didn’t “necessarily want to make a deal” with the countries asking him for a reprieve. When asked to explain the sudden reversal of position, Bessent simply replied: “No.”
One could argue that it was less an act of courage than a last-minute decision to turn away from the cliff Trump was steering the U.S. economy off. The financial markets may not longer be in free fall, but it’s hard to have much confidence in an economy that is being driven by Trump and Trump alone.
