‘It just became crazy’: what swayed Trump to backtrack on tariffs
Bond market chaos and recession risks prompted Trump to execute one of the biggest economic policy reversals in modern presidential history
As Donald Trump’s sweeping “reciprocal” tariffs took effect just after midnight on Wednesday, the president was watching the bond market.
Long-term yields were soaring. The 10-year Treasury saw the biggest three-day jump since 2001. The president was confronting a worst-case scenario: voters who had returned him to the White House because of inflation now faced both increased prices and higher borrowing costs.
“People were getting a little queasy,” Trump said.
The president had for days been debating whether to fully push ahead with the tariff programme, which resulted from a frenetic meeting with his economic aides just hours before he rolled out the announcement in the White House Rose Garden last week.
China, which met Trump’s tariffs with equal retaliatory measures, was the only country not offered a reprieve; instead, the president again raised tariffs on the world’s second-largest economy.