President Trump stunned trade observers yet again with another quick pivot on trade, announcing in a social media post that he would authorize a 90-day pause on his reciprocal tariff plans while keeping the 10% duties that went into effect last weekend on most of the world in place.
“These Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump posted.
The president also announced he would be unilaterally raising the rate on China further to 125% because of “the lack of respect that China has shown.”
The market relief was immediately evident with stocks spiking by more than 7%.
Treasury Secretary Scott Bessent told reporters after the president’s announcement that the president’s decision had nothing to do with the market turmoil of the past week, saying that “this was his strategy all along.”
More than 75 countries have contacted the US to start talks on the reciprocal tariffs, Bessent added, and thus the 90-day pause allows the US to create a “bespoke” solution for all of them with Trump personally involved.
“It’s just [a] processing problem,” he said.
The decision from Trump also came after he posted on social media that it was a “great time to buy” and urged his followers to “stay cool.”
The move puts also even more focus on China as the White House appears to try to isolate the world’s second largest economy by beginning talks with China’s neighbors while continuing to raise duties faced by China itself.
“China is the most imbalanced economy in the history of the world,” Bessent added to reporters Wednesday afternoon, calling it the “biggest source” of US trade troubles.
It was not immediately clear what the effect would be on places like the European Union, which announced its own reciprocal tariff plans in recent hours but went unmentioned in Trump’s post. Bessent didn’t respond to shouted questions from reporters on that topic and a White House spokesperson didn’t immediately respond to a request for clarity.
Either way, it was yet another shocking turn in Trump’s second-term trade agenda that came after new duties went into effect at 12:01 a.m. ET with historic double-digit duties on America’s allies and a 104% base rate on Chinese goods.
Terry Haines of Pangaea Policy added in the immediate aftermath of the news that another fact that could be boosting markets is that now “Bessent is the main adviser, while [Commerce Secretary Howard] Lutnick is in charge of the negotiating details, something that’s likely soothing to the Street.”
