The UK could face a trade-war reprieve, after Donald Trump appeared to announce a 90-day suspension of tariffs against 75 countries that have not retaliated and have sought to negotiate with the United States.
In an opaquely worded statement on Truth Social, the US president praised countries that had acted in this fashion, and said he had “authorised a 90 day pause, and a substantially lowered reciprocal tariff during this period, of 10 per cent, also effective immediately”.
It was unclear whether this will merely reduce tariffs to a blanket 10 per cent, or will put them on hold entirely over the 90-day period, but is likely to reassure global markets somewhat after a week of intense economic turmoil.
However, Mr Trump simultaneously intensified his trade war with China by announcing immediate new tariffs of 125 per cent, after Beijing moved to impose 84 per cent retaliatory levies.
Before Mr Trump’s announcement, analysts warned that the US Federal Reserve could be forced to intervene to stabilise the bond market after a sharp rise in US Treasury yields overnight, signalling that US assets were temporarily losing their safe-haven status.
Watch: Trump says ‘no other president would have done what I did’
Trump says ‘people were getting a little bit afraid’
Asked why he paused his tariffs, just hours after telling the markets to “be cool”, Donald Trump told reporters: “I thought that people were jumping a little bit out of line.
“They were getting yippy … a little bit afraid.”
Pressed on whether he could consider exempting some larger companies which have been particularly hard-hit by the recent market turmoil, the US president said: “We’re going to take a look at it, there are some that have been hard, there are some that by the nature of the company get hit a little bit harder.”
Asked how he will determine which companies were hardest-hit, Mr Trump said: “Just instinctively.”
The bond market now is beautiful, says Trump
Donald Trump said the bond market had recovered well after investors became queasy about it in reaction to his tariffs.
Earlier on Wednesday, analysts had warned that the US Federal Reserve could be forced to intervene to stabilise the bond market after a sharp rise in US Treasury yields overnight, signalling that US assets were temporarily losing their safe-haven status.
US 10-year Treasury yields hit a seven-week high of nearly 4.5 per cent – but have now fallen back to 4.34.
“The bond market now is beautiful,” Mr Trump told reporters, speaking after a $39-bn auction also eased concerns by coming in within market expectations, priced at a high yield of 4.435 per cent, lower than the rate forecast at the bid deadline – suggesting solid investor demand.
Cool and calm pays off, says government source
Government sources said Mr Trumps decision showed “cool and calm can pay off”.
One said: “It’s how the PM does business and it’s the right approach. He has been urging it in all his calls this week and will continue to.”
We’ll keep negotiating with US, says Downing Street
Downing Street said the government would continue to talk to the US administration.
A No10 spokesperson said: “A trade war is in nobody’s interests. We don’t want any tariffs at all, so for jobs and livelihoods across the UK, we will coolly and calmly continue to negotiate in Britain’s interests.”
US deal not enough, pledges Starmer
Sir Keir Starmer has warned that striking an economic deal with the US or securing lowered American tariff rates for the UK would not be “enough” for Britain.
Before Donald Trump suspended or reduced most of his tariffs, the Prime Minister conceded he was unsure whether the 10% import tax imposed on British goods would be in place indefinitely and said the Government must “step up” to adapt to a rapidly changing world.
United European approach pays off, says next German leader
Friedrich Merz, Germany’s likely next chancellor, said US President Donald Trump’s pause of tariffs for 90 days was evidence of a united European approach to trade having a positive effect, and called for tariff-free US-EU trade.
“Europeans are determined to defend ourselves and this example shows that unity helps most of all,” he told TV show RTL Direkt.
“Let’s all set tariffs of 0% on transatlantic trade, and then the problem will be solved,” he added.
US stock markets soar to near-record gains after Trump announces pause on most of his tariff plan
US stock markets have soared to near-record gains after Donald Trump announced a pause on most of his sweeping global tariffs.
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This is Trump’s Liz Truss moment, say Lib Dems
Responding to news that Donald Trump has paused higher tariffs against most countries for 90 days, Liberal Democrat Leader Ed Davey said: “This is Donald Trump’s Liz Truss moment.
“He’s been forced into an embarrassing climbdown. Now we need to get him to go further and get rid of his remaining reckless tariffs. That means an economic coalition of the willing and uniting with our allies.”