US President Donald Trump has revealed a temporary moratorium on the vast majority of his "reciprocal" tariffs, stating that he took the move because investors and officials were becoming increasingly anxious. On Wednesday, in remarks to the press, Trump stated that people were getting "yippy" and "a little bit fearful," and thus he acted more flexibly.
The revised policy lowers tariffs to 10% for imports from countries that have refrained from retaliating with additional duties on American products. This shift affects over 75 nations currently seeking to reach trade understandings with the US, including India, which remains in ongoing discussions with Washington over a potential Bilateral Trade Agreement.
But China is the exception to this rebalancing. As a response to Beijing's 84% tariff on US imports, Trump has raised tariffs on Chinese imports to an eye-watering 125%.
The revised restrictions were disclosed in a Wednesday afternoon Truth Social posting, during yet another unstable US financial market day. There was a steep sale-off in bonds earlier, sending new concern for the worry factor, but this disclosure helped quiet jitters — the Nasdaq rallied spectacularly to its best level in twenty years.
When asked for an explanation of the abrupt policy shift, Trump said, "I thought that people were jumping a little bit out of line," and went on to add, "They were getting yippie, you know, they were getting a little bit a little bit afraid." Setting the tone for his approach, he noted, "You have to be flexible."
While the administration had previously made the "reciprocal" tariffs non-negotiable, insiders report Trump had been inclined towards a compromise for weeks. The President has reported making the decision to trigger the 90-day suspension on Wednesday morning.
In his official statement, Trump announced, "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 per cent, effective immediately."
He went on, "In contrast, and based on the fact that over 75 Countries have invited Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a resolution to the matters being considered relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non-Monetary Tariffs and that these Countries have not, at my strong urging, retaliated in any shape, form, or manner against the United States, I have authorized a 90-day PAUSE, and a significantly reduced Reciprocal Tariff over this period, of 10 per cent, also effective immediately."
Markets have been unstable since Trump introduced his reciprocal tariff regime, and the voices calling for a cooling off had been increasing. Powerful Wall Street voices, such as investor Bill Ackman, had called for a cooling off. The tariff policy has also attracted criticism from Tesla CEO Elon Musk, who has publicly sparred with Trump's trade adviser, Peter Navarro.
Focusing his attention on the nervous markets, Trump tried to calm investors with a tweet that said, "Be cool! Everything is going to work out well. The USA will be bigger and better than ever before." Shortly after, he put out a strong message in all capital letters: "This is a great time to buy."
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