President Donald Trump announced so-called “reciprocal” tariffs will be paused for 90 days while leaving the 10% tariffs across the board in place, sending the markets rebounding significantly Wednesday afternoon. Trump made the announcement on his social media platform Truth Social, where he said China will get an even higher tariff than the 104% that was implemented at 12:01 a.m. ET on Wednesday, raised to 125% starting today.
“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,” Trump wrote. “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 went on to explain that 75 countries had come to negotiate on tariffs, though it’s unclear how countries like Australia, which buys more from the U.S. than it exports, could even begin to negotiate on anything like a trade deficit when it already didn’t have any tariffs against the U.S.
“Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that 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. Thank you for your attention to this matter!” Trump wrote.
It wasn’t initially clear if tariffs against the European Union would remain in place, given the fact that it announced a 25% retaliatory tariff, but CNBC reported the EU will see the baseline 10% tariff. CNBC also got clarity from the White House that 25% tariffs on Canada and Mexico’s will remain.
Treasury Secretary Scott Bessent declared victory at a press conference outside the White House shortly after Trump’s tweet, insisting the president had been successful by bringing countries to the negotiating table with “maximum negotiating leverage.” But, again, it’s not clear how anything has changed at this point, as countries simply appear frustrated with the manic energy of Trump.
Trump first announced his wildly disruptive tariff plan on April 2, where he presented a now-infamous chart claiming to show the “tariffs” imposed on the U.S. by each country. In reality, the number showed no such thing and was actually calculated by taking the trade deficit and dividing by exports. Various countries around the world are clearly frustrated with Trump’s tactics and many have pointed out that the U.S. built the system it’s now trying to destroy. The long-term plan seems to be that countries will now try to route around the U.S. rather than clamoring to trade with Americans.
“What the U.S. is doing now is not reform. It is rejecting the very system it created,” Singapore’s Prime Minister Lawrence Wong said to his country’s parliament on Tuesday.
Standing next to White House Press Secretary Karoline Leavitt, Bessent was asked Wednesday why people should assume this is the end to the chaos. “The only certainty we can provide is that the U.S. is gonna negotiate in good faith. And we assume that our allies will too,” Bessent said.
Peter Navarro, the Trump advisor who’s celebrated tariffs the hardest, was notably absent from the quick press conference outside the White House on Wednesday. Bessent has been the one who’s been suggesting repeatedly that Trump’s tariff plan has always been about negotiating and extracting concessions from other countries.
“Each one of these solutions is going to be bespoke. It is going to take some time. And President Trump wants to be personally involved,” Bessent said.
Curiously, the S&P 500 surged at 1:02 p.m. ET without any major news, leading some people on social media to wonder what was happening. But it was just a few minutes earlier, at 12:56 p.m. ET that news broke with a Politico tweet that Bessent had cancelled a meeting on Capitol Hill with House Republicans. It then came out that Bessent had been called to an urgent meeting at the White House, perhaps signalling that something big was about to happen.
Later on Wednesday Trump spoke to reporters at the White House, insisting that he had succeeded and was now going to get trade concessions from other countries. Trump was also asked about the bond markets, acknowledging that he was watching them yesterday.
“I was watching the bond market. It’s very tricky. If you look at it now it’s beautiful. The bond market right now is beautiful. But I saw last night where people were getting a little queasy,” Trump said.
“There will be fair deals with everybody. But they weren’t fair to the United States. They were sucking us dry,” Trump said.
Do you feel great again yet, America?
