Tariffs dwell: Trump proclaims 90-day pause for many international locations however hits China with 125% levy
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.
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.
You can refresh our breaking report below for more details, and we’ll be bringing you more live updates here on the blog:
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.”
Markets ‘didn’t understand’ Trump’s tariffs strategy, claims US Treasury secretary
US Treasury secretary Scott Bessent has claimed that the markets “didn’t understand” Donald Trump’s tariff strategy.
“The market didn’t understand, those were maximum levels. The countries can think about those levels as they come to us to bring down their tariffs, their non-trade barriers,” he told reporters at the White House.
He said Mr Trump “created maximum negotiating leverage for himself” and the Chinese have “shown themselves to the world as the bad actors”.
US Treasury secretary denies 90-day pause due to market turmoil
Asked whether the 90-day pause on “reciprocal tariffs” was due to the chaos in financial markets, US Treasury secretary Scott Bessent told reporters outside the White House: “No. It’s because of a large number of inbounds – we’ve had more than 75 countries contact us and I imagine, after today, there will be more.
“So it is just a processing problem. 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 – so that’s why we’re giving the 90-day pause.”
WTO says trade between US and China could drop by as much as 80%
The World Trade Organisation has estimated that Donald Trump’s trade war could cut the trade of goods between the US and China by as much as 80 per cent.
“This tit-for-tat approach between the world’s two largest economies, which together account for roughly 3 per cent of global trade, carries wider implications that could severely damage the global economic outlook,” it said.
Dividing the global economy into two blocs in this way could lead to a long-term reduction in global real GDP by nearly 7 per cent, the statement added.
Its preliminary estimate was issued around the time Mr Trump further raised tariffs on imports from China but paused some others for 90 days.
Wall Street soars after Trump announces 90-day tariff pause
Wall Street’s main stock indexes have soared after Donald Trump announced he had authorised a 90-day pause on some tariffs, effective immediately.
The Dow Jones Industrial Average has now risen 6.2 per cent in today’s trading, while the S&P 500 has gained 6.9 per cent, and the Nasdaq Composite has shot up by 8.6 per cent.
Trump announces 90-day pause on some tariffs – but hits China with 125 per cent levy
Donald Trump has announced he will immediately raise tariffs on Chinese goods to 125 per cent – and appeared to call a 90-day pause in tariffs on 75 nations which have not retaliated and sought to negotiate with the US.
For the latter nations, Mr Trump said – in an opaquely worded statement – that he had “authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately”.
Writing on Truth Social, he hit out at China and claimed: “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.”
But in better news for Washington’s allies, the US president added: “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.”
Analysis | Trump created his own reality. Now we’re all stuck in it
“My fellow Americans, this is Liberation Day,” Donald Trump said from the White House Rose Garden, using a term of his own making as he unveiled a sweeping tariff plan against all US trading partners.
The day will “forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” the president said.
Wednesday’s fanfare stood in the face of advice from droves of experts, who warned about the “catastrophic” effects these taxes would have on US consumers. One day after “Liberation Day,” global stock markets plummeted and world leaders vowed to retaliate.
In his inaugural address, the president said “like never before” five times, and the tariffs plan is just the latest example of his ability to construct an alternate version of reality.
“We really haven’t seen anything like this,” Chapman Rackaway, a political science professor at Radford University, told The Independent. He called this level of reality-bending “unprecedented” in modern US history.
Read more in this analysis piece by our US news reporter Kelly Rissman:
Trump created his own reality. Now we’re all stuck in it
Watch: JPMorgan chief says he expects a recession after Trump tariffs
Posting on Truth Social shortly after the interview, Mr Trump wrote: “‘Fixing Trade and Tariffs is a good thing!’ Jamie Dimon, JPMorgan Chase, Chairman & CEO, on Maria B Show!”
In reality, however, Dimon warned that a recession was a “likely outcome” due to Trump’s sweeping tariffs and that he expected loan defaults to rise amid an economic slowdown.
Watch a clip from the interview below:
UK 30-year gilt yields close at 5.6% after hitting highest point since 1998
The cost of long-term borrowing has risen for the UK government after British 30-year gilt yields surged to their highest point since 1998 on Wednesday to hit 5.61 per cent, surpassing a previous 27-year high set in January.
The yield was at 5.6 per cent when London’s financial markets closed for the day, in moves that followed a sharp rise in 30-year US Treasury yields overnight – signalling that US assets were temporarily losing their safe-haven status, analysts said, as Donald Trump’s tariffs continue to wreak havoc on global markets.
George Saravelos, global head of foreign exchange research at Deutsche Bank, said that if the turbulence continues, “we see no other option for the Fed but to step in with emergency purchases of US Treasuries to stabilise the bond market”, in a similar intervention to that by the Bank of England following Liz Truss’s disastrous 2022 mini-Budget.
Mr Saravelos added: “While we suspect the Fed could be successful in stabilising the market in the short-term, we would argue there is only one thing that can stabilise some of the more medium-term financial market shifts that have been unleashed: a reversal in the policies of the Trump administration itself.”
The sell-off in UK gilts, meanwhile, came amid rising bets from investors that the Bank of England will need to cut rates faster than previously expected this year.
Most traders now expect a rate cut of at least a quarter point at the Bank’s next meeting in May, while some were even pricing in a half-point drop.
