 "Explained: The frantic few hours that led Trump to pause higher tariffs")
“Don’t be weak, don’t be stupid, don’t be a panican,” US President Donald Trump wrote on Truth Social on Monday, in response to a growing number of people expressing concern over his tariff policy.
The following day, he told Republicans, “I know what the hell I’m doing” as the massive tariffs he had imposed sent global markets into a tailspin. Moreover, he also revelled in the fact that world leaders were “dying to make a deal”, adding that they were “kissing my a*s.”
And on Wednesday morning, Trump once again wrote a social media post, “Be cool. Everything is going to work out well,” in response to his tariffs.
But hours later, he shocked the world and his own people when he announced a 90-day pause in the higher rate of “reciprocal tariffs”, barring China, that had been in force for a mere 13 hours. When asked what brought about the turnaround, Trump said, “They were getting yippy. They were getting a little bit yippy, a little afraid.”
As the markets jump back following Trump’s reversal, we take a closer look at what exactly led the US president to change his mind on his pet topic — tariffs.
Markets matter — they really do
If there was one driving factor behind Trump’s tariff reversal it has to be the markets and how they have performed since April 2 — the day he announced his ‘Liberation Day’ tariffs.
When the tariffs went into effect last Wednesday, the markets tanked. Then came investor fears of a ‘ Black Monday ’. It is reported that Trump’s tariffs wiped off $10 trillion (£7.8 trillion) of global share prices in a matter of days.
But that didn’t rattle the US president, much.
However, on Wednesday, things drastically changed for Trump. The US witnessed a sharp sell-off in US government bond markets, which is usually a safe corner for investors. Interest rates on 10-year Treasury bonds had been rising, contrary to what normally happens when stock prices fall and investors seek safety in treasuries. The unusual dynamic meant that at the same time, the tariffs could push up prices, people would be paying more to buy homes or pay off credit card debt because of higher interest rates. Businesses looking to expand would pay more for new loans.
This was of particular concern to Treasury Secretary Scott Bessent, whose finance career was deeply intertwined with the bond market. According to one administration official, it was Bessent who then urged Trump to suspend the tariffs in light of the bond market.
Later, while announcing his 90-day pause, Trump even acknowledged the bond market, saying, “The bond market is very tricky, I was watching it. The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”
Criticism rings loud and clear
But the markets weren’t the sole factor influencing Trump’s decision on the tariff pause. Trump also was contending with massive criticism from business leaders, billionaires — people he could normally bank on for support.
For instance, billionaire hedge fund boss and previously a Trump backer — Bill Ackman — turned on the president, warning that his tariffs risked an “economic nuclear winter”.
In fact, Ackman, as The Telegraph reports, is the origin of Trump’s 90-day pause. He had earlier taken to social media, asking Trump to put a 90-day pause on tariffs, arguing the president can “accomplish his objectives without destroying small businesses in the short term”.
In a lengthy post on X, Ackman, founder of Pershing Square Capital Management, issued a dire warning of what could happen if the tariffs weren’t halted immediately. “If the president doesn’t pause the effect of the tariffs soon, many small businesses will go bankrupt,” Ackman wrote. “Medium-sized businesses will be next.”
Trump’s ‘First Buddy’ Elon Musk also seemed to be unhappy with the tariff policy. Trump’s Doge leader had spent recent days slamming the tariff decision and mocking Peter Navarro, the president’s advisor on trade matters, in deeply personal terms. In fact, Musk went as far as calling Navarro a “moron” and “dumber than a sack of bricks”.
And it seems that JPMorgan Chase & Co Chief Executive Officer Jamie Dimon also played an instrumental role in changing Trump’s mind. On Wednesday, around 8 am, Trump watched the Dimon give an interview to Fox News in which he cautioned that a recession was a “likely outcome” given the economic uncertainty, explaining that he was hearing from most everyone he spoke to that they were “cutting back” as a result.
“Markets aren’t always right, but sometimes they are right,” Dimon told Fox Business’ Maria Bartiromo. He added, “I’m taking a calm view, but I think it could get worse if we don’t make some progress here.”
Deal mania runs high in the White House
It’s also reported that the tariff pause came as Trump’s team struggled to cope with the countries trying to make a deal. As The Times reported, they simply could not cope with the whirlwind that Trump had unleashed.
Moreover, executives had been flooding the phone lines of Chief of Staff Susie Wiles, Vice President JD Vance, and Treasury Secretary Scott Bessent to make the case to Trump directly.
In a Bloomberg report, Commerce Secretary Howard Lutnick acknowledged that the flood of outreach from other countries making “the right kind of offers” also played a role. The media outlet reported that Trump was particularly intrigued that countries were beginning to offer concessions that hadn’t previously been on the table, including addressing non-tariff trade barriers. “It just became crazy, the amount of calls we got,” Lutnick said.
Trump reverses his decision
All of this put together led to Trump swaying and he decided that he would pause the tariffs. Trump then sat down with Lutnick and Bessent and drafted a social media post to tell the world that he was, for now, rolling back the tariffs.
After the announcement, Trump aides raced to declare that it had been the strategy all along. Bessent said the change of tack wasn’t driven by market volatility, and was instead about a desire to tailor new trade deals with affected trading partners that have been flooding the White House with requests to negotiate. “It is just a processing problem,” said Bessent. “Each one of these solutions is going to be bespoke, it is going to take some time, and President Trump wants to be personally involved, so that’s why we’re giving the 90-day pause.”
Trump later said that the decision to change course on his tariff plan came “from the heart”. He said, “Over the last few days, I’ve been thinking about it. I think it probably came together early this morning, fairly early this morning. Just wrote it up, I didn’t — we didn’t have the use of — we didn’t have access to lawyers … We wrote it up from our hearts, right? It was written from the heart, and I think it was well written too.”
Trump’s decision has definitely given the world some breathing space — at least for the next 90 days. What comes next, no one knows.
With inputs from agencies
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