In the face of mounting criticism, market chaos, and signs the economy was rapidly destabilizing, U.S. President Donald Trump has caved by announcing a 90-day pause on ‘reciprocal’ tariffs.
Donald Trump has blinked.
In a Truth Social post, the U.S. President announced what amounts to a unilateral surrender in the tariff fight he launched against nearly the entire world.
You can read the full statement below:
“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. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.
Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”
While Trump is trying to save face, this is a surrender by the U.S. President. Very few countries have launched negotiations with the United States, and Trump has won few concessions from those hit with ‘reciprocal’ tariffs. Trump’s claim regarding the lack of retaliation is also untrue. Today, the European Union announced retaliation on €22 billion worth of U.S. goods.
Trump’s insistence on massive tariffs had caused a market meltdown, put upward pressure on U.S. bond yields, and many of Trump’s most powerful backers were increasingly outspoken in their criticism.
Hedge fund manager Bill Ackman was one of the most aggressive in raising the alarm, as he noted in a statement issued before the tariff pause:
“Our stock market is down. Bond yields are up and the dollar is declining. These are not the markers of successful policy.
I am receiving an increasing number of emails and texts from small business people I do business with or have invested in, expressing fear that they will not be able to pass on their increased costs to their customers and will suffer severely negative consequences.”
Republicans and Democrats in Congress have also taken escalating steps to strip Trump of his authority to impose tariffs, which would have represented a humiliating defeat for the U.S. President.
Trump now shows that he will blink to market pressure and political pressure, and he has damaged confidence in the reliability of the United States. From using an absurd formula to calculate ‘reciprocal’ tariffs, to having top Administration officials saying completely different things on the same day, and a complete misunderstanding of what trade deficits represent, Trump has left America – and the global economy – worse off than before he launched his misguided trade war.
In response to ongoing U.S. chaos and unreliability, Canada must continue to free up trade within our borders and deepen trade ties to reliable partners in the European Union and the Asia-Pacific region.
Spencer Fernando
Photo – YouTube
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