In a dramatic shift, U.S. President Donald Trump announced a temporary pause on sweeping new tariffs targeting dozens of countries, calming financial markets after days of turmoil. The move came less than 24 hours after the tariffs were imposed, triggering the worst volatility since the early COVID-19 crisis and erasing trillions from global stock markets.
Trump’s decision followed a surge in U.S. bond yields and investor panic, with the president noting, “You have to be flexible.” Despite the pause, a 10% blanket tariff remains, and duties on steel, aluminum, and autos stay unchanged. Canada and Mexico also still face 25% fentanyl-related tariffs unless they comply with USMCA rules.
While Trump scaled back some tariffs, he intensified pressure on China, raising tariffs on Chinese goods to 125%, escalating tensions between the world’s top economies. China, expected to hold its ground, has so far responded with tit-for-tat measures. Trump’s unpredictability continues to unsettle global leaders and businesses.
Markets responded positively to the tariff freeze. The S&P 500 jumped 9.5%, Japan’s Nikkei surged nearly 9%, and bond yields eased. Still, analysts warn the economic damage isn’t fully reversed, as business and consumer confidence remain shaken. A Goldman Sachs forecast now sees a 45% chance of recession, down from 65%.
Treasury Secretary Scott Bessent claimed the tariff reversal was always part of a broader strategy to bring countries to the negotiating table. Over 75 countries have reportedly reached out for talks, though China may not be a priority in initial discussions.
Trump later posted on Truth Social, urging calm: “BE COOL! Everything is going to work out well.” He added, “THIS IS A GREAT TIME TO BUY!!!”