US President Donald Trump and his administration have insisted that increased tariffs on countries around the world would not be tampered with. When reports emerged on Monday that Trump was considering suspending tariffs on imports of foreign goods for three months, the White House called the reports "fake news". But on Wednesday evening Danish time it happened anyway.
After a week of global panic in the financial markets, Trump suspended retaliatory tariffs for 90 days. This means that the increased tariffs of 20 percent for the EU, among other things, will be scrapped.
Instead, a basic tariff of ten percent will apply across the board. Except for China, with which the US is in an ever-escalating tariff war. This means that less than 24 hours passed from the time the increased tariffs against most of the US's trading partners came into effect until they were paused again.
The question on many lips is now what made Trump change his mind. According to his Treasury Secretary, Scott Bessent, the pause has been Trump's "strategy all along". The plan has been to get countries to the negotiating table, and it has succeeded. However, according to Reuters, Trump has indicated that the panic in global markets since he announced the new tariffs on April 2 has played a role in the decision.
After insisting for days that his policies would not change, he said on Wednesday that "you have to be flexible". Trump also said that he had been considering the pause for several days. Apparently, he has been pressured by both Republican party members and the business community.
On Wednesday, the pressure became so great that he changed course. CNN writes, which has spoken to three anonymous people with knowledge of the matter. According to CNN's sources, it was one development in particular that made Trump press the pause button. A sharp increase in sales of US government bonds - a normally safe market for investors - showed that the economic consequences of the strategy were potentially "catastrophic and worse than his advisers had expected", writes CNN.
According to the people CNN has spoken to, the increased concern in the Treasury Department about developments in the government bond market was a central factor in the decision. Treasury Secretary Scott Bessent is said to have raised the concerns directly with Trump on Wednesday. According to CNN, this happened in a meeting before the tariff break was announced.
Trump says the decision was made early Wednesday morning local time. In addition, top business people have also increasingly expressed concern to advisers in the White House. That should also have contributed to the new course.
But the Trump administration insists that it has all been part of a larger plan that has brought 75 countries to the negotiating table. It is no wonder that businessman Donald Trump has written "The Art of the Deal" - a book about negotiation tactics.
- You have clearly failed to see what President Trump is doing here. The whole world is calling the United States.
- Many of you in the media have clearly overlooked the art of negotiation (art of the deal, ed.), said Karoline Leavitt, a spokeswoman for the White House, on Wednesday.
Ultimately, the reasons and thoughts behind Trump's decision are probably irrelevant, notes the BBC. The reality is now that the United States is taking a less hostile line towards its trading partners. Even though the ten percent basic tariff in itself would have been huge news just a few weeks ago. The increased tariffs on steel, aluminum and cars also remain in place.
But in 90 days the pause will expire, and then this week's economic drama and uncertainty could start all over again.
jel /ritzau/
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