Trump pauses some tariffs but ramps up China tax

What happened

President Donald Trump reversed course Wednesday, suspending most "reciprocal" tariffs 13 hours after they took effect but keeping the 10% tax on almost all imported goods and raising his tariffs for China to 125%. Trump's announcement of a 90-day pause led to a rally in slumping markets, erasing some of the huge losses since he announced his steep tariffs April 2.

Who said what

Trump's "stunning reversal" followed days of insistence that his "historically high tariffs were here to stay," said CNN. "Be cool!" Trump said on social media Wednesday morning, followed shortly by: "This is a great time to buy!"

The White House "tried to characterize" Trump's "jarring" U-turn as "part of a grand negotiating strategy," The Associated Press said, but to anyone "outside the Trump administration, it looked like a cave-in to market pressure." Treasury Secretary Scott Bessent told reporters that Trump's about-face "was his strategy all along." But shortly afterward, Trump said he had acted after people were "getting a little bit yippy, a little bit afraid."

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"Ultimately, Trump caved to the bond markets," Heather Long said at The Washington Post. The sharp selloff of U.S. Treasuries signaled that investors no longer see the U.S. as "rock solid," as it's "impossible to make sense of what Trump is doing." The "simultaneous decline in equities, bonds" and the U.S. dollar showed the market had "switched to a 'sell everything American' mode reminiscent of what sometimes happens to emerging economies," The Wall Street Journal said. And Trump's "sudden reversal doesn't mean all the damage will be quickly undone."

What next?

The 90-day pause "triggered a powerful stock market rally," but there are signs it won't last, the AP said, and "businesses, investors and America's trading partners" remain "bewildered" and unable to plan for the future. Trump's import taxes are still the highest in decades, his future plans are unclear, and China's foreign ministry said this morning it "won't back down" in the escalating trade war.