Trump reverses course on reciprocal tariffs, announces 90-day 'pause' for all but China

President Donald Trump on Wednesday dramatically reversed course on steep global tariffs that have roiled markets, upset members of his own party and raised fears of a recession, saying just hours after stiff levies went into effect on nearly 60 countries that he would pause them for 90 days.

But the president did not back down on China and instead raised tariffs once again on all of its exports to the United States, bringing those import taxes to 125%. That decision came after Beijing had raised its levies on American goods to 84% in an escalating tit-for-tat between the world’s largest economies.

In a post on Truth Social, the president said that he had authorized “a 90 day PAUSE” in which countries would face “a substantially lowered Reciprocal Tariff” of 10%. As a result, almost every trading partner now faces a 10% blanket tariff, except for China, which faces a 125% tax.

The S&P 500 climbed about 7% in a matter of minutes after Trump’s post, reversing days of losses. Wednesday was the best day for the S&P 500 since the recovery from the 2008 financial crisis.

Asked why he decided to pause the tariffs just hours after imposing them, Trump seemed to acknowledge the market rout that had erased trillions of stock market wealth in recent days.

“Well, I thought that people were jumping a little bit out of line,” he said. “They were getting yippy. They were getting a little bit afraid.”

Trump’s change in course came amid a sharp sell-off in U.S. government bond markets and the dollar, which are typically seen as the safest corner for investors during times of turmoil. Investors had watched trillions in stock market value vanish in a matter of days, and economists increasingly sounded alarms that the United States might be careening toward a recession of its own making.

Trump’s advisers tried to spin his decision as a win and not a capitulation.

“The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction,” Commerce Secretary Howard Lutnick said.

But many analysts expressed skepticism. Emily Kilcrease, a senior fellow and director at the Center for a New American Security, said that the pause could be interpreted “as a reaction to the rapid decline in the U.S. stock markets, and the increased calls from even members of Congress on the Republican side to put some order around the negotiations.”