Tariffs stay: Trump publicizes 90-day pause for many nations however hits China with 125% levy
Donald Trump has backed down in his global trade war, as the US president announced a 90-day period in which his so-called “reciprocal tariffs” will be lowered to 10 per cent for most countries.
In an opaquely worded statement on Truth Social, Mr Trump praised 75 countries which he said had not retaliated and had sought to negotiate with Washington, saying he had “authorised a 90 day pause, and a substantially lowered reciprocal tariff during this period, of 10 per cent, also effective immediately”.
Simultaneously, Mr Trump 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.
While a Whitehall source claimed the 90-day pause showed “cool and calm can pay off”, it is understood that Sir Keir Starmer’s government is not expecting any immediate change to the UK’s current 10 per cent levy.
Wall Street stocks soared in response to Mr Trump’s softening of stance, with the tech-heavy Nasdaq closing 12.1 per cent higher, and the S&P 500 up 9.5 per cent.
Watch: Trump says he’ll use ‘instinct’ to determine which firms could be exempt from tariffs
Fox pundit says Trump was forced to capitulate on tariffs by a bonds sell-off in Japan
Speaking on the typically Trump-friendly Fox Business, journalist Charlie Gasparino said in no uncertain terms that it was the US president “who capitulated” in his global tariffs showdown, as a result of uncertainty in the US bond market – which had prompted talk of a possible intervention by the US Federal Reserve.
Mr Gasparino said: “Let’s be clear what happened, who capitulated here and why … it is the White House who capitulated based on everything I hear and all my sources, and the reason why is because of the bond market and what happened last night.”
Writing on social media, he added: “Top money managers say it was Japan, not China, selling last night that upended the bond market and forced Trump’s hand into a pause.”
Wall Street closes after major gains in wake of Trump tariff softening
Wall Street has been offered a reprieve following Donald Trump’s announcement, with the S&P 500 closing up 9.5 per cent on Wednesday, the Nasdaq gained 12.1 per cent and the Dow Jones rose by 7.8 in Wednesday’s trading.
However, the S&P 500 remains 3.7 per cent lower than it was prior to Mr Trump’s “Liberation Day” announcement seven days ago, while the Nasdaq is down 2.7 per cent, and the Dow Jones down 3.8.
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.
