Freezing tariffs worldwide for 90 days, how Donald Trump changed his mind

US President Donald Trump on Wednesday pulled back from a series of harsh tariffs targeting friends and foes in a bold attempt to reshape the global economic order.

Trump's announcement this afternoon followed a harrowing week in which Republican lawmakers and aides privately warned him that the tariffs could devastate the economy, Sky News reports.

His aides had quietly raised the alarm in financial markets before he suspended a tariff regime that he had unveiled just a week earlier at a ceremony in the Rose Garden.

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The stock market surged shortly after the open, ending days of losses that have forced older Americans who have sunk their savings into 401(k)s to rethink their retirement plans.

Before Trump's announcement, some of his advisers had been almost panicking about bond markets, a senior administration official told Sky News' US partner network NBC News.
Interest rates on 10-year Treasury notes were rising, contrary to what normally happens when stock prices fall and investors seek safety in Treasuries.

The unusual dynamic meant that at the same time that tariffs could push up prices, people would pay more to buy homes or pay off credit card debt because of higher interest rates. Businesses looking to expand would pay more for new loans.

Two of Trump's top advisers, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, presented a united front on Wednesday, urging him to suspend the tariffs, the administration official said.

In a social media post, Trump announced a 90-day pause, which he said he would use to negotiate deals with dozens of countries that have expressed openness to reviewing trade terms that he claims exploit American businesses and workers.

One exception is China. Trump increased the tariff on the country's biggest geopolitical rival to 125%, part of an escalation in a developing trade war.

Trump reversed course a week after appearing in the Rose Garden and unveiling his plan to bring jobs back to the United States. Showing a graphic showing the new, increased tariffs that countries would face, Mr. Trump declared: "This is Liberation Day."

However, markets plunged in anticipation of escalating trade wars, wiping out trillions of dollars in wealth.

The episode revealed divisions within Trump's team of senior advisers, as the White House struggled to offer a clear and consistent argument about the duration of the tariffs.

While Mr. Bessent seemed open to negotiations, Peter Navarro, a senior trade adviser, seemed to have a tougher stance.

Elon Musk, the billionaire chief executive of Tesla, who has advised Mr. Trump on the government workforce, called Navarro “dumber than a sack of bricks,” while Navarro described Musk as someone who is simply “a car assembler, in many cases.”

Asked about the feud between Musk and Navarro, Republican Senator Lindsey Graham, a golf partner of Mr. Trump, said: "I don't think it matters. The only one who matters is Trump."

Markets tend to favor predictability, as do business leaders deciding where to build new factories. However, when Mr. Trump sets a course, there are bound to be deviations.

A friend of his who spoke with him in recent days said Trump gave no sign that he would "back off on these things quickly."

Trump believes other countries trade unfairly and sees tariffs as a tool to make the United States more competitive, the person said.