Trump backs down: US announces pause on reciprocal tariffs

US President Donald Trump on Wednesday said he would pause his reciprocal tariffs for most countries for the next 90 days, backing down on his policy that had sent markets into a tailspin and threatened to upend global trade.

But Trump said his break did not include China, announcing he would instead raise tariffs on its exports to 125 after Beijing announced a new round of retaliation.

Karoline Leavitt, the White House press secretary, said the tariff level would be brought down to a universal 10% — a significant reduction for many countries.

In announcing the pause, the White House repeatedly tried to suggest it was all part of a premeditated strategy. Leavitt accused reporters of having “failed to see what President Trump is doing here,” and Scott Bessent, secretary of the Treasury, said it was Trump’s “strategy all along.”

But the abrupt change in course came amid a sell-off in US bonds, which are generally safer investments, and after days of deep losses in financial markets around the globe. Economists had expressed serious concerns that the United States might be careening toward a recession of its own making.

The reversal, which prompted the S&P 500 to climb over 7% in a matter of minutes, followed another whirlwind day. Trump’s latest tariffs had hit nearly all U.S. trading partners with new levies and raised import taxes on Chinese goods to 104%. Beijing then announced additional tariffs on imports from the United States, for a total levy of 84.

Shortly before that, European Union member states voted to approve counter-tariffs against the United States that would take effect next Tuesday, its first response to Trump’s levies.

Documents showed that duties of 25% would be applied to a wide range of goods imported from the United States, including products as varied as corn and plate glass. The bloc said its countermeasures “can be suspended at any time, should the US agree to a fair and balanced negotiated outcome.”