Why did Trump pause his tariff plan just hours after it took effect?

White House backs down on reciprocal tariff measures. Was Trump's sudden tariff reversal a calculated move or a sign of miscalculation by the administration?

US President Donald Trump abruptly reversed part of his new tariff policy just hours after it was officially implemented. The decision, made public through a social media post, caught even senior administration officials off guard. According to a report by The Wall Street Journal, Treasury Secretary Scott Bessent played a pivotal role in persuading Trump to rethink his approach, highlighting market turmoil, economic risks, and the potential for strategic trade negotiations.

 

The decision to pause certain tariffs for 90 days came after a week of market volatility, mounting concerns from corporate executives, and warnings from financial analysts about the potential consequences of aggressive trade policies. The initial tariff hikes, aimed at multiple countries including China, had triggered a sharp downturn in stocks and bonds, with business leaders warning of severe economic repercussions.

 

Experts warn of recession, market crash

The administration initially framed the tariffs as a necessary step in securing favourable trade deals, but the sharp downturn in stock and bond markets may have forced White House to reconsider. 

JPMorgan Chase CEO Jamie Dimon and other top executives voiced concerns that the escalating trade war could tip the US into a recession.

 

Trump has reportedly been closely monitoring media coverage and market reactions to his policies. Hours after the tariffs went into effect, the US President decided to adjust his approach.  ALSO READ | Trump compliments Xi Jinping, calls him 'a very smart man' amid tariff war

 

Tariff pause: A calculated move or sign of weakness?

According to a report by The Wall Street Journal, here’s what transpired in the days leading up to the tariff deadline and Trump’s decision to pause its implementation:

 

Treasury Secretary Scott Bessent, who had been flooded with calls from worried investors over the weekend, flew to Florida for a private meeting with Trump. The treasury secretary convinced President Trump that pausing the tariffs wouldn’t be a sign of weakness but rather a calculated move to bring trading partners to the negotiating table. Trump agreed, and upon returning to Washington on Air Force One, he authorised Bessent to publicly communicate the administration’s intent to seek new trade deals.

 

The official announcement, however, came as a surprise even to some of Trump’s closest advisers. US Trade Representative Jamieson Greer, who was testifying before Congress at the time, learned of the decision only after lawmakers brought it up. White House Chief of Staff Susie Wiles had been fielding frantic calls from business leaders urging the administration to reconsider its aggressive tariff stance.

 

Inside the White House, opinions were divided. While some saw the move as strategic flexibility, others viewed it as an admission of miscalculation.

 

ALSO READ | US companies hit hard by Trump's tariff plans; can they expect relief?

 

Musk makes direct appeals to Trump

Earlier, a report by The Washington Post suggested that Trump’s close advisor and tech billionaire Elon Musk had also urged the president to reverse his tariffs. However, these requests were not adhered to. Musk’s EV venture Tesla has faced major backlash since he began making sweeping funding cuts to federal departments. Many Tesla vehicles have been vandalised and sales have dropped in foreign markets. Musk, who is also the founder of SpaceX and owner of X, saw his personal fortune drop below $300 billion.

 

Drastic action, public reaction, policy adjustment

This episode mirrors Trump’s past approach to policy-making which involves taking a bold initial stance, gauging reactions, and then adjusting as needed. The administration previously rolled back stricter energy-efficiency standards and reversed several regulatory measures after facing public and corporate backlash.

 

People getting ‘yippy’: Trump on tariff pause

Addressing the media after the announcement, Trump explained that the move was made out of investor and public concern.

“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,” the President said.  ALSO READ | China reaches out to others for support against US as Trump adds tariffs

 

Market rebound as Trump hits pause button

Markets rebounded swiftly following Trump’s announcement, reflecting investor relief. The president, meanwhile, framed the reversal as part of a broader negotiation strategy.

 

“We don’t want to hurt countries that don’t need to be hurt, and they all want to negotiate,” he told reporters. Trump’s supporters defended the move, arguing that his unconventional approach - starting with extreme measures and then adjusting – was a hallmark of his leadership style.

 

US tariffs on China remain

Despite the pause, tariffs on China were still increased to 125 per cent, signalling that Trump remained committed to applying pressure on Beijing. Administration officials maintained that the tariff strategy was designed to strengthen US economic and national security interests. However, critics, including some Republican lawmakers, called the process chaotic and damaging to business confidence.