Trump Pauses Tariffs : Focuses in on China
It seemed as if nothing would soften President Donald Trump’s stance on his all out global trade offensive. The financial markets and governments throughout the world were thrown into a sea of chaos last Wednesday . When the markets opened again this Monday there was a sea of red which was dubbed “Black Monday” by analysts and commentators. Global leaders, investors and average citizens advocated for a U-turn on this decision. However as the week has continued Trump seemed committed to steer the course. Telling everyone to “be cool” and “not to panic” Coining the phrase “Panicans” for those Americans who doubted the validity and value of his new policies. Yet, here we are on Wednesday and Trump pauses tariffs on the vast majority of countries excluding China.
What Was the Plan?
When President Trump unveiled his sweeping tariff plan, he boldly declared it would "make America wealthy again." However, the specifics of the plan and its ultimate goals were unclear. In the lead-up to the announcement, his economic team debated until the eleventh hour about the structure of the tariffs. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick reportedly advised a more restrained approach, according to insiders. Yet, there was no clear consensus on the strategy within the Trump camp. As spokespeople step forward to assert that this was "all part of the plan," questions linger: Did the administration design the tariffs as a bargaining chip to secure better trade deals, or as a long-term strategy to boost revenue and bring manufacturing back to the U.S.?
Trump Pauses Tariffs
For all of Trump’s bravado and claims “the pain would be short term” and this was “medicine” for America, it seems that turbulence in the markets has made him pause for thought. Particularly a staggering rise in government bond yields prompted The President to announce a 90 day pause on tariffs this Wednesday afternoon just a week after they were first announced. All countries will receive a reprieve excluding his arch nemesis China who will still be subject to eye watering 125% tariffs. It seems that Trump pausing the tariffs signals a shift to all out trade war with China. China has responded in kind with reciprocal tariffs.
Sources
The New York Times - From ‘Be Cool!’ to ‘Getting Yippy’: Inside Trump’s Reversal on Tariffs
Reuters - Trump's tariff pause focuses trade war on China, markets bounce
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