Markets jumped as Trump paused tariffs
Just hours after President Trump imposed steep tariffs on dozens of America’s trading partners, he reversed course. The president announced yesterday afternoon that nearly all of his so-called reciprocal tariffs would be paused for 90 days, and that he might consider exempting some U.S. companies from the tariffs.
Nearly every U.S. trading partner instead faces a 10 percent blanket tariff, on top of 25 percent tariffs on cars, steel and aluminum — but China, which had sharply retaliated, will have an even higher 125 percent tariff, up from a 104 percent figure proposed yesterday. Neither side wants to look weak by backing down, but a collapse of their trade ties could have profound consequences.
Slumping markets quickly rallied. The S&P 500 ended the day up 9.5 percent, its largest daily increase since 2008. The tariffs, which Trump had raised to the highest level in a century, had caused economists to warn of recession risks. Markets in Asia soared in the countries that were spared.
White House officials repeatedly tried to suggest that the change in policy was a premeditated strategy devised to secure favorable deals. But Trump himself acknowledged that his decision was made in response to the market turmoil, particularly in the bond market. (Go inside his decision.)
Quotable: “Trump is obsessed with tariffs, but he’s also obsessed with doing deals,” Steven Erlanger, who covers trade and diplomacy for The Times, told me. “No one can quite decide whether he was actually trying to remake the entire global trading system, which he has said some days, or whether he wants all these countries to come crawling on their knees to him to do a better deal, which is what he has said other days.”
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