President Donald Trump said Wednesday that he is pausing his tariffs regime for 90 days on more than 75 trading partners who did not retaliate in the hours after it went into effect, a stunning reversal from the White House after days of painfully volatile moves in U.S. markets.
In a post on Truth Social just before 1:30 p.m., Trump wrote that his decision was based on these countries having called to “discuss” trade-barrier issues with the U.S. after Trump’s latest round of tariffs went into effect after midnight.
The pause did not apply to China — which has clapped back at Trump’s tariffs. Trump instead said duties against China would now climb to a total of 125%, effective immediately. Treasury Secretary Scott Bessent said separate tariffs on imported autos, steel and aluminum will remain in place — while planned “sectoral” tariffs on items like lumber and pharmaceuticals are still in the works.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” he wrote. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”
The announcement came just hours after Trump appeared to be digging in, telling Americans “BE COOL” in a Truth Social post, insisting: “Everything is going to work out well. The USA will be bigger and better than ever before!”
It’s not clear what prompted Trump to change his mind — he suggested not that long ago the tariffs could be permanent. But a growing chorus of his allies and business leaders came out publicly against the tariffs, including Elon Musk.
But markets have been in turmoil — major stock indexes shed trillions of dollars in value, while alarming signals from the bond market set Wall Street on edge. When a false-at-the-time headline suggesting Trump would take a 90-day pause shot around the internet on Monday, markets briefly soared on the news.
Despite that negative market reaction, Trump and his allies had doubled down on the tariffs over the past week, arguing that they were necessary to return manufacturing to the U.S. and fill the U.S. coffers with trillions of dollars in revenue that could be used to pay down debt or offset tax cuts. At the lower 10% tariff rate, there will be less incentive for companies to relocate production to the U.S. and less revenue being generated from tariffs.
Bessent sought to make the about-face on tariffs into a negotiating tactic, saying it was a way to scare countries into coming to the negotiating table by demonstrating how high the U.S. was going to go on tariffs.
“President Trump created maximum negotiating leverage for himself,” Bessent said.
Still, it is unclear how successful the U.S. will be at negotiating new trade agreements with other countries in light of the on-again, off-again nature of Trump’s tariff threats over the past several months. Previously, Trump had threatened sweeping tariffs on all imports from Mexico and Canada before walking most of those tariffs back.
It was not clear which countries would be covered by the pause; earlier Wednesday the E.U. voted to impose fresh retaliatory duties, but those aren’t set to take effect until next week.
A 10% duty across-the-board duty will remain in place for these countries, Trump added. White House officials confirmed the 10% duty will also apply to Canada and Mexico.
Commerce Secretary Howard Lutnick, who has played a prominent role in helping Trump craft his tariffs message, posted to X that he sat with Trump as he posted the pause message, adding: “The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction.”
Markets soared on the news, with the S&P 500 climbing more than 7%, the tech-heavy Nasdaq up as much as 9%, and the Dow Jones Industrial Average up nearly 7%, or more than 2,000 points.
Borrowing costs, which had surged early Wednesday as the tariffs took effect, also eased slightly, though not substantially as some investors may fear a lingering fallout from the tariffs episode.
