Trump backs down and announces a 90-day tariff pause

WashingtonPresident Donald Trump announced this Wednesday a 90-day pause in tariffs for countries that have not retaliated against the United States. In the same announcement, he said that nations subject to so-called "reciprocal tariffs" would only be subject to a 10% surcharge during this period. At a dinner with Republican congressmen on Tuesday, Trump boasted that thanks to his trade policy, all countries were "licking his ass." Now he's backtracking on his measure, although the White House maintains that "this was always the president's intention." At the same time, the 25% tariffs on automobiles would continue, as well as those announced for aluminum and steel.

From the Oval Office, Trump ended by subtly acknowledging that the tariff truce was a last-minute decision made "this morning." "We didn't have access to lawyers, I mean, we just wrote it. We wrote it from the heart," the tycoon stated. In recent hours, investors had begun dumping US Treasury bonds, which meant the country's financial stability was in question. Faced with this, the White House added pressure. In fact, the president has pointed to bonds as one of the reasons for his change of heart. "The [Treasury] bond market is nice now," he told reporters after announcing the truce.

The only exception to this retreat is China, which instead of applying 10%, is seeing its taxes increased by up to 125%. The trade war easing for most states is a way to further increase pressure on the Asian giant, with whom the Republican has continued to escalate and heighten tensions.

Last week, when Trump presented his tariff table to the world, China was expected to be subject to a 34% tariff. Shortly after, when Beijing refused to bow to the president's pressure and said it would respond to Trump's trade policy with new tariffs, the president raised the figure to 84%. This, added to the 20% he began implementing upon taking office, brought the total tariffs on China to 104%. China counterattacked Wednesday morning with an 84% cut in US imports.As a result, Trump has once again raised the bar, increasing tariffs on Beijing products to 125%.

"At some point, hopefully in the near future, I wish China would realize that the days of profiting from the United States and other countries are no longer sustainable or acceptable," the president wrote to his own. postThe White House version is that China is responsible for the tariff escalation.

Regarding the tariff truce, Trump says he has "authorized a 90-day pause, with a substantially reduced reciprocal tariff during this period, of 10%, also effective immediately." The tycoon does not specify which countries will be affected, although he presents it as a response to the fact that "more than 75 countries" have contacted the United States to try to renegotiate trade relations. Later, Treasury Secretary Scott Bessent clarified that the tariff pause implies that the so-called reciprocal tariffs will be reduced to 10%. He also assured that countries that did not apply new tariffs in retaliation for US taxes will be "rewarded."

Trump continues to rock the stock markets and, after days of free fall, Wall Street has experienced a historic rebound following the US president's announcement. The Nasdaq closed up 12%, the S&P 500 up 9.5%—its best day since 2008—and the Dow Jones up nearly 8%.

The Trump administration's backtracking comes after days of sinking markets and billionaires and investors beginning to rebel against the president. Throughout the morning, the president insisted on urging calm while the Treasury Secretary defended in a meeting with bankers that the country's economy "is in very good shape." The comment came after days in which JP Morgan sounded the bells of recession, which was practically a given if the administration continued its tariff crusade.

The market collapse has caused even billionaires and executives, who until now had kept their criticism to their inner circles, to publicly criticize Trump. Billionaire investor Bill Ackmann, who supported Trump during the last campaign, said publicly that the tariffs imposed by the president would tip the country into a recession. Ackmann also suggested the idea of a 90-day truce, which is what the president has now implemented. Elon Musk had also tried to convince Trump in person to reconsider tariffs after saying in an interview that zero tariffs should be applied to trade relations with the European Union. The tycoon's disregard for the Tesla owner's words is another symptom of the cooling relationship between the two.

After announcing the partial pause, Bessent defended to reporters that the truce was not a result of market pressure. "This has always been Trump's plan all along," said the secretary, who added that "the market hadn't understood" the president's tariff plan. Trump also spoke to the press after the announcement. The tycoon assured that "over time" he will consider exceptions for some companies, while saying that the "bond market is beautiful."

Until now, Trump had defended the need to go all the way with tariffs and had ruled out the possibility of a tax pause despite the initiation of negotiations with other countries. When a reporter asked him about his change of heart and where his credibility lies after such an abrupt change, Trump replied that "you have to have some flexibility." He also described the day as "historic" following the rebound in markets, which had been in the doldrums for days as a result of his tariffs.