Well, this screws up my writing schedule for the day. I had a post scheduled for this time but this one is much more important.
President Trump just paused almost all his tariff increases, citing the flood of countries begging for new trade deals to avoid the massive increase in business costs they would impose on them.
BREAKING: President Trump issues a 90-day pause on tariffs “and a substantially lowered Reciprocal Tariff during this period of 10%,” except for China.
The president has raised tariffs on China to 125%, effective immediately. pic.twitter.com/XNBKA6uH7S
— Collin Rugg (@CollinRugg) April 9, 2025
Is this an about-face, or exactly what Trump has been aiming for?
In many negotiations one side or the other will walk away, implying that their interest in the deal isn’t great enough to make the concessions the other side wants. More often than not, that leads to concessions from the side that is getting rebuffed.
It’s exploiting an asymmetry in power.
NEW TRUTH SOCIAL FROM PRESIDENT TRUMP:
🇨🇳125% TARIFF ON CHINA
🌎90-DAY PAUSE & LOWERED 10% RECIPROCAL TARIFF FOR OTHER COUNTRIES🚨EFFECTIVE IMMEDIATELY pic.twitter.com/Gt5Bd6276m
— The White House (@WhiteHouse) April 9, 2025
One of the arguments I have been making about Trump’s potential strategy was that his rhetoric and actions were not about permanently imposing tariffs as an economic move, but imposing them as a means to force other countries to the table. about half the countries in the world have rushed to begin negotiations to reduce their own tariffs in exchange for continued access to the US market.
Almost $4 TRILLION just got added back to the stock market in mere minutes after President Trump issued a 90-day pause on the larger tariffs. pic.twitter.com/vi9R0g4AU9
— George (@BehizyTweets) April 9, 2025
Well, that theory now has some legs.
Donald Trump has slammed the brakes on his highest “reciprocal” tariffs for the next 90 days, but has stepped up his retaliation on China.
On his Truth Social platform, he said: “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately”.
He added that because over 75 countries want to negotiate deals with the US, he had “authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
Wall Street surged on the news, with the S&P 500 now up 7.5pc and the Nasdaq up 9.6pc.
Hours earlier, Mr Trump had urged investors to buy stocks.
Trump has been telling everybody to calm down, and they should have listened.
Foreign countries would not be coming to America trying to reduce their tariffs if Pres. Trump had not done what he did.
Pres. Trump won—let’s pounce on these deals like a ninja. pic.twitter.com/22KYOeDhFF
— John Kennedy (@SenJohnKennedy) April 9, 2025
I have a piece coming later today–it was supposed to be published in this time slot, actually, about the Republican civil war on tariffs. I will revise it and print it later today. The reason for the civil war needs explaining in any case.
One note: the trade war with China is not going away. He is doubling down on those, and I believe the explanation is both related to national security and economics, since China is our main manufacturing rival and is ridiculous in stealing our intellectual property when we manufacture there.
Kevin O’Leary explains his reasoning.
NEW: Kevin O’Leary calls for 400% tariffs on China, says it’s time to “squeeze Chinese heads into the wall.”
O’Leary praised Trump for playing hardball with the Chinese.
“They cheat, they steal. They steal IP. I can’t litigate in their courts.”
“You may not like Trump, you may… pic.twitter.com/PMVaDzP5V4
— Collin Rugg (@CollinRugg) April 9, 2025
NEW: Kevin O’Leary calls for 400% tariffs on China, says it’s time to “squeeze Chinese heads into the wall.”
O’Leary praised Trump for playing hardball with the Chinese.
“They cheat, they steal. They steal IP. I can’t litigate in their courts.”
“You may not like Trump, you may not like his style or his rhetoric.”
“Finally an administration that puts up and says enough. 400% tariffs tomorrow morning…”
“America is the number one economy on Earth with all the cards.”
For me the big question on this policy is trying to figure out Trump’s aim with the tariffs. If he believes tariffs create prosperity, then he is wrong. If he wants to use tariffs as a negotiation tool and succeeds, then he is a genius.
Let’s hope he is a genius. It sure looks like the second option is on the table.
