By Alan Rappeport, Ana Swanson, Tony Romm and Joe Rennison
Stocks soared on Wednesday after President Trump abruptly announced he would back down on his “reciprocal” tariffs for 90 days, with the S&P 500 rising more than 9 percent as the markets closed.
Karoline Leavitt: Many in the media ‘clearly missed’ the ‘Art of the Deal’
Wall Street’s gleeful embrace of the policy reversal reflected relief that Mr. Trump would not follow through with most of his plans for the tariffs, which had sent markets into a tailspin and threatened to upend global trade. But while many countries would have their tariffs reduced, Mr. Trump said the relief would not extend to one of America’s biggest trading partners, China, announcing that he would instead raise tariffs on its exports to 125 percent after Beijing announced a new round of retaliation.
Karoline Leavitt, the White House press secretary, said the tariff rate would otherwise be brought down to a universal 10 percent — a significant reduction for many countries.
In announcing the pause, the White House repeatedly tried to suggest it was part of a premeditated strategy. Ms. Leavitt accused reporters of having “failed to see what President Trump is doing here,” and Scott Bessent, the Treasury secretary, said it was Mr. Trump’s “strategy all along.”
But the abrupt change in course came amid a sell-off in U.S. 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.
And Mr. Trump himself acknowledged that his decision was made in response to the market turmoil, telling reporters Wednesday afternoon that “you have to be flexible,” and that “over the last few days it looked pretty glum.”
The reversal followed another tumultuous day. Before the pivot, Mr. Trump’s latest tariffs had hit nearly all U.S. trading partners, with Beijing offering the starkest response — a total levy of 84 percent on American-made products.
The fact that China wasn’t excluded from Mr. Trump’s reversal, though, meant many American importers were not out of danger.
“Respite? Further economic suicide?” asked Peter Boockvar, chief investment officer of Bleakley Financial Group. “It will all depend on where you source product from, of course, and unfortunately about $450 billion is still being imported from China.”
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