President Donald Trump had a moment of hesitation. In a way.
At 1:18 p.m. on Wednesday, following nearly a week of economic turmoil, Trump declared a 90-day halt on most of the drastic “reciprocal” tariffs that had caused global markets to plummet. Concurrently, he unveiled an increase in punitive tariffs against China, his primary trade adversary and the largest source of U.S. imports, raising them to 125%. He maintained the new blanket 10% tariff on most goods from the rest of the world, including those entering from Mexico and Canada.
While markets reacted positively and the White House celebrated, it was evident that this was a significant step back, though not a complete reversal. Much like the unpredictable nature of Trump’s decisions, global leaders and countless businesses are left uncertain about whether these new regulations will remain in effect for even the duration of this sentence.
“It took great courage for him to hold out until now,” Treasury Secretary Scott Bessent expressed to reporters on the White House driveway. “This was his strategy all along,” he remarked, just a day after press secretary Karoline Leavitt praised Trump’s “spine of steel” when questioned about a potential tariff pause.
“Let’s be clear, nothing is resolved yet,” Trump stated to reporters on the South Lawn of the White House. “We’ll see how it all plays out.” (When queried if the declining bond market influenced his recent change in stance, he remarked, “The bond market right now is beautiful. But I noticed last night that things were making people a bit uneasy.”)
This represented a dizzying experience of chaos that has characterized Washington – and a considerable part of the world – over the past week. Here, a capricious President initiated a global panic that wiped $11 trillion from Wall Street, raised the average U.S. tariff rate to its highest point since 1909, and arguably initiated the largest effective tax increase on American families in over seven decades.
Since Trump introduced the concept of a “tariff wall” around the U.S., foreign nations have been reaching out to Washington, offering to forge new trade agreements or at least to gain clarity on what Trump aims to achieve with his tough stance. It was like Trump had become the new ruler of the sandbox, throwing a tantrum that left his intimidated peers shaken.
White House officials indicate that Trump will engage directly in the upcoming trade negotiations over the next three months. It promises to be an interesting endeavor for a man who considers himself a top-tier dealmaker, but it will also contribute to considerable uncertainty as summer approaches, leaving Congress more bewildered than ever.
The frustration from Congress has been evident since Trump regained power in January and has become increasingly impossible to ignore in the past week. For instance, Senator Mark Warner expressed his outrage during a memorable exchange with Jamieson Greer, Trump’s chief trade representative.
The Virginia Democrat took advantage of his turn to question Greer during a Senate Finance Committee session to voice his total disdain for the new tariffs slated to take effect within hours, unaware that they would partially disappear shortly thereafter. At one point, in a manner some might describe as raised incredulity, Warner pointed out that many of the tariffs, in his view, made no logical sense—especially those imposed on countries that buy more from the U.S. than vice versa.
“We have a trade surplus with Australia. We have a free-trade agreement. They are a crucial national security ally. Why were they subjected to a tariff?” Warner exclaimed.
Greer remained composed and pointed out that the 10% tariff is on the lower end of the spectrum. “We should be maximizing the potential,” he informed the Senators, noting that the funds could aid in reducing the national deficit.
This type of perplexing rationale is what Trump officials and supporters have been providing lately to justify a trade strategy lacking a clear objective. Warner offered perhaps the most charitable response he could convey: “Sir, you are much too intelligent for that response.”
The majority of Washington shares Warner’s sentiment regarding tariffs that seem driven solely by Trump’s grievances and intuition. This tit-for-tat escalation resulted in immediate reprisals, with China imposing substantial new charges on its imports from the U.S. Europe retaliated with 25% tariffs on many American-made products entering their markets. Wall Street was poised for another day of losses until Trump surprised investors by suspending much of the damage he had previously enacted for three months.
While Trump continued to promote the tariffs as permanent policy on Wednesday, it was evident that his support was waning. Even his staunchest defenders and supporters were becoming increasingly tired of discussing these tariffs, which have only begun to take effect.
“I admire President Trump,” remarked Senator Ted Cruz, a Republican from Texas, on his podcast. “I am his strongest supporter in the Senate. I believe he’s accomplishing remarkable things as President. However, one thing is essential to understand: A tariff is a tax, and it primarily burdens American consumers.”
Similar sentiments were echoed by podcaster Ben Shapiro, another supporter of Trump. “The President’s perspective on international trade is, unfortunately, misguided,” he stated.
Prior to the market-shocking news, I spoke with Brad Setser, who served in the Treasury Department during the Obama administration and in the trade office during Biden’s tenure. He accurately anticipated Wednesday’s announcement, down to the exact baseline tariff. However, he pointed out that trade agreements require time and a shared understanding of the outcomes.
“The difficulty is that there is still no clarity for anyone — especially for the nations trying to negotiate exit strategies — about what an acceptable agreement might look like,” he conveyed to me.
Although Trump claimed repeatedly that the tariffs were not intended as a starting point for negotiations, the White House had been boasting that numerous countries had approached them regarding side agreements to mitigate the impact of these taxes. This seemed to suggest that perhaps Trump was merely engaged in yet another of his reality show-inspired antics.
Prior to the latest backtrack, Scott Lincicome, a trade specialist at the libertarian Cato Institute, outlined three possible outcomes: Trump might encounter enough backlash and retreat from his aggressive stance; the courts might intervene, deeming this an overreach of emergency powers; or Congress might take action.
“All of these options are unfavorable,” Lincicome remarked. “The courts are unpredictable, and Congress is ineffective.”
Indeed, this uncertainty is why Trump’s sudden shift—even if it is temporary—came as a shock and sent waves through the markets and caused an uproar in Washington.
“It’s unfortunate, but not catastrophic,” Lincicome stated. “I don’t consider myself an optimist, but we do need to be cautious about overreacting.”
Perhaps that’s the approach needed to navigate this second chapter of the Trump presidency. Or simply waiting for the President to change his mind again.
