US President Donald Trump. Photo: Leah Millis/ Reuters
Following pressure from the financial markets and growing fears of a possible recession, former US President Donald Trump announced a 90-day pause in the application of new tariffs. However, China remained under the most severe restrictions, with tariffs increasing by up to 125%. This was reported by CNN.
Bonds have influenced politics
Trump has publicly acknowledged that the decision to suspend the new tariffs was partly driven by the reaction of financial markets, in particular, the volatility in the bond market.
“I have been following the bond market. It is very difficult. But right now, everything looks good,” he said.
Last week, Trump announced the most aggressive customs barriers in 100 years. In response, the yield on 10-year US bonds rose from 3.9% to 4.4%, signalling a massive sell-off in assets.
Recession is on the horizon: JPMorgan warns
JPMorgan Chase CEO Jamie Dimon said on Fox Business that the recession is a “likely consequence” of the escalation of the tariff conflict. According to him, someone had to “pull the trigger” – and Trump was that someone.
Financial analysts at JPMorgan have raised their estimate of the probability of a recession in the US and the world from 40% to 60%.
China is an exception to the pause
Although the US is temporarily suspending new duties for most countries, China is in the red zone.
“China wants a deal. But they don’t know how to approach it. They are proud people,” Trump said, referring to President Xi Jinping.
Tariffs on Chinese goods will rise to 125%, which, according to experts, will further complicate negotiations between Washington and Beijing.
Businesses are under attack
Trump acknowledged that the new tariffs had hurt some US companies and promised to consider individual appeals.
“Some of them suffered much more. We will analyse everything,” he said.
Flexibility at the heart of the new strategy
Trump, who positions himself as a tough negotiator, this time stressed the need for flexibility in trade policy:
“We have to be flexible.”
His team has not yet disclosed what will happen after 90 days, but sources in the White House say that it is possible to partially revise the duties depending on the reaction of partners.
