President Donald Trump reversed course in the global trade war he launched just a week ago, announcing in a social media post a 90-day pause on new tariffs against every country but China.
That came just hours after Trump urged the country to “BE COOL” in another post that came amid continued worldwide chaos, with China and the European Union hitting back and the financial fallout spreading to bond markets.
As he halted his broader tariff program amid rising recession fears, Trump ratcheted up tariffs against China to 125 percent, based, he wrote, “on the lack of respect that China has shown to the World’s Markets.”
Beijing on Wednesday imposed additional tariffs on imports from the United States for a total of 84 percent, a response to the White House expanding tariffs on all Chinese goods to 104 percent.
“When you punch at the United States of America, President Trump is going to punch back harder,” press secretary Karoline Leavitt told reporters outside the West Wing following Trump’s announcement. It had been just 24 hours since she told reporters there were no plans to delay or reverse any of the tariffs.
The walk-back by Trump — albeit with a 10 percent reciprocal tariff on countries during the pause — sent the stock market back into positive territory after several days of huge losses. Treasury Secretary Scott Bessent, who spoke to reporters alongside Leavitt, outlined plans to sit down with his counterparts from Japan, Vietnam and South Korea this week to work on bilateral trade agreements.
“We saw the successful negotiating strategy President Trump implemented a week ago today and it has brought more than 75 countries forward to negotiate,” Bessent said. “It took great courage for him to stay the course until this moment. And what we have ended up with here — as I told everyone a week ago [here] in this very — do not retaliate, and you will be rewarded. So every country in the world who wants to come and negotiate, we are willing to hear you.”
Trump’s inner circle had discussed a 90-day pause, which national economic advisor Kevin Hassett teased as a possibility during an appearance on Fox News. But it was anything but locked in until Wednesday, when China’s escalation of tariffs and continued market turmoil led the president and his team to coalesce around the plan, according to a person close to the White House who has granted anonymity to detail internal discussions.
Bessent, the person added, “was critical in feeding into Trump’s instincts of going after China” as a means of finding something of an off-ramp. “He convinced him that going after China is a popular position. Do that and let’s work out a pause on everyone else while we negotiate.”
Speaking to reporters, Bessent disputed the suggestion that Trump standing down from his trade war, which erased trillions in value from global markets in less than a week, was a recognition of the turmoil he’d created.
“No, President Trump created maximum negotiating leverage for himself,” Bessent said, adding that cementing formal agreements to avoid the reimplementation of tariffs would “take some time.”
Bessent, who flew to Palm Beach last weekend to discuss the spiraling trade war with the president, said that the nation’s financial markets failed to understand that Trump’s tariffs had been a maximal opening salvo in a negotiation.
Commerce Secretary Howard Lutnick posted on X that he and Bessent were in the Oval Office with Trump as he typed out his post announcing the shift in policy.
And a number of officials and GOP lawmakers in close contact with the White House had gotten a sense it was coming, even if they found out in real time.
Sen. Ted Cruz (R-Texas), who warned Tuesday that a prolonged trade war would be “disastrous,” told reporters Wednesday just before the tariff move was announced that he had been talking with the White House and Trump directly, urging him to back off.
“I am doing everything I can to urge the president to listen to the voices of the angels and not the devils,” Cruz told reporters.
U.S. Trade Representative Jamieson Greer told the House Ways and Means Committee that he knew a pause on the tariffs was under discussion when he entered the hearing Wednesday morning, but that he only learned of the pause in real time.
“I understand it’s 90 days, I haven’t spoken to the president since I’ve been in this hearing,” Greer said.
Democrats, who have lambasted the administration for the disruptive policy, were unmoved.
“It looks like your boss just pulled the rug out from under you and paused the tariffs, the taxes on the American people. There is no strategy, you just found out three seconds ago, we saw you,” said Rep. Steven Horsford (D-Nev.).
Until the president’s announcement Wednesday afternoon, neither Trump’s promises of better times ahead nor his aides’ and often contradictory reassurances and rationales had calmed the markets. If anything, they added to the uncertainty that caused trading indexes to spiral out of control and other countries to respond in kind.
Industry CEOs and lobbyists have spent the last few days appealing to anyone who might have direct access to Trump, in an effort to get information in front of the president about the damage that an extended trade war would have on various parts of the economy.
During an appearance on Fox Business Channel Wednesday morning, JP Morgan Chase CEO Jamie Dimon said a recession was “a likely outcome” of Trump’s trade war.
Just as China announced its counter-tariffs, EU member states voted to approve counter-tariffs against the U.S. that would take effect Tuesday, the bloc’s first response to Trump’s tariffs on steel and aluminum from Europe.
Bessent, who asserted that Trump had “goaded” China into retaliating, did not say why Europe’s retaliation wasn’t similarly punished by the White House.
The EU’s retaliatory tariffs will affect nearly €21 billion of U.S. products — everything from soybeans to motorcycles and orange juice — and take effect in three waves.
Daniel Derosches, Ben Leonard, Jake Traylor and Doug Palmer contributed to this report.