Economic turmoil, particularly a rapid rise in government bond yields, caused President Trump to reverse course on the steep levies.
For the past week, President Trump has been urging calm in the face of the financial chaos that he created and resisting calls for him to rethink his approach.
“I know what the hell I’m doing,” he told Republicans on Tuesday as the massive tariffs he had imposed sent global markets into a tailspin. “BE COOL!” he said in a social media post on Wednesday morning. “Everything is going to work out well.”
At 9:37 a.m. Wednesday, the president was still bullish on his policy, posting on Truth Social: “THIS IS A GREAT TIME TO BUY!!!”
But in the end, it was the markets that got him to reverse course.
The economic turmoil, particularly a rapid rise in government bond yields, caused Mr. Trump to blink on Wednesday afternoon and pause his “reciprocal” tariffs for most countries for the next 90 days, according to four people with direct knowledge of the president’s decision.
Asked to explain the decision, Mr. Trump told reporters: “Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid.”
Behind the scenes, senior members of Mr. Trump’s team had feared a financial panic that could spiral out of control and potentially devastate the economy. Treasury Secretary Scott Bessent and others on the president’s team, including Vice President JD Vance, had been pushing for a more structured approach to the trade conflict that would focus on isolating China as the worst actor while still sending a broader message that Mr. Trump was serious about cracking down on trade imbalances.