In a dramatic shift that stunned global markets, President Donald Trump on Wednesday announced a 90-day pause on most new tariffs, temporarily easing the economic pressure on dozens of countries while significantly ramping up penalties on China.
The announcement, which came just a day after sweeping duties kicked in, followed a period of intense financial market turmoil that wiped trillions from global stock values and sent U.S. bond yields soaring. Trump's reversal quickly turned markets around, sending the S&P 500 up more than 9% and fueling a global rebound.
The White House echoed the strategy behind the move in a pointed post on X: "DO NOT RETALIATE AND YOU WILL BE REWARDED", accompanied by a video clip of Treasury Secretary Scott Bessent addressing reporters outside the West Wing.
“As I told everyone a week ago, in this very spot, do not retaliate and you will be rewarded,” Bessent said. “And we saw the successful negotiating strategy that President Trump implemented a week ago today. It has brought more than 75 countries forward to negotiate. It took great courage — great courage — for him to stay the course until this moment.”
Bessent explained that countries willing to engage in talks with the U.S. would see tariffs drop to a 10% baseline during the 90-day window, while China would face heightened penalties.
“Every country in the world who wants to come and negotiate, we are willing to hear you,” he said. “We're going to go down to a 10% baseline tariff for them. And China will be raised to 125 due to their insistence on escalation.”
Trump confirmed the policy change in a Truth Social post: “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
The tariff on Chinese goods, however, will rise to 125%, escalating what has already been a tense standoff between the world’s two largest economies.
Treasury Secretary Bessent defended the approach as intentional, not reactive. “This was driven by the president’s strategy. He and I had a long talk on Sunday, and this was his strategy all along,” Bessent said. “You might even say he goaded China into a bad position. They responded. They have shown themselves to the world to be bad actors.”
A source familiar with the talks told CNN that Bessent met with Trump at Mar-a-Lago over the weekend and urged a renewed focus on striking fresh trade deals. Bessent said Trump will remain personally involved in negotiations.
“No one creates leverage for himself like President Trump,” Bessent said.
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