President Donald Trump’s abrupt decision to reverse course on his sweeping tariff plan by announcing a three-month pause revealed his threshold for political pain: One week. “They were getting yippy,” Trump said, explaining the rising criticism raining down on the White House over the last week. “They were getting a little bit yippy, a little afraid.” Even for a president famous for his policy bobs and weaves, Wednesday’s announcement he was pausing his long-touted reciprocal tariffs for three months amounted to a stunning reversal of a plan he had appeared only a day earlier to be fully behind and came as his own trade representative was testifying on Capitol Hill to the benefits of the tariffs, seemingly catching him unaware of the pause.
Days of pressure from fellow Republicans, business executives and even his close friends hadn’t appeared to move Trump, who insisted last week: “MY POLICIES WILL NEVER CHANGE.” By Wednesday, however, it had become evident the campaign to convince Trump to change course would not let up. It had also become plain after a sharp sell-off in US government bond markets — usually a safe corner for investors — that the economic ramifications of the president’s strategy were potentially catastrophic and worse than his advisers had previously predicted. The growing alarm inside the Treasury Department over developments in the bond market was a central factor in Trump’s decision to hit pause on his “reciprocal” tariff regime, according to three people familiar with the matter.
Treasury Secretary Scott Bessent raised those concerns directly to Trump Wednesday in a meeting that preceded the pause announcement, underscoring concerns shared by White House economic officials who had briefed Trump on the accelerating selloff in the US Treasury market earlier in the day. Calls to top White House advisors from key business community allies also increasingly focused on the troubling developments in the bond market as they made the case for Trump to pull back. Trump had not yet made the decision to pause the dramatic new tariff rates when he was posting on social media about the stock market Wednesday morning, two of the people said. But he acknowledged later in the afternoon that he’d been watching the bond market turmoil closely. “The bond market is very tricky, I was watching it,” Trump told reporters. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.” Sitting in the Oval Office to tap out his announcement, Trump was joined by two advisers who had become dueling faces of the tariff plan: Bessent and Commerce Secretary Howard Lutnick.
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Trump’s ‘buy’ tip on social media before his tariffs pause made money for investors who listened
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“We didn’t have access to lawyers or – it was just wrote up. We wrote it up from our hearts, right? It was written from the heart, and I think it was well written too, but it was written from the heart,” Trump said afterward, describing a process driven more by impulse than mapped-out strategy. Even as Trump calmed the markets – for now, at least – he also raised new questions by suggesting he would consider exempting some US companies from tariffs, saying he would make any such decisions “instinctively.”
Whirlwind Wednesday
It was another whirlwind Wednesday at the White House, with advisers scrambling to keep pace with the president’s decisions. He sought to take a victory lap after one of the most humbling retreats of his presidency, eager to take credit for the stock market gains Wednesday – without mentioning the record-setting, trillion-dollar losses over the last week. “It’s the biggest increase in the history of the stock market. That’s pretty good,” Trump told reporters in the Oval Office. “If you keep going, you’re going to be back to where it was four weeks ago.” If Trump was planning early Wednesday to pause his new tariffs after days of market turmoil, he did not reveal his intentions widely. Many White House officials heard of his decision at the same time the world learned, via post on Truth Social, that the new tariffs were on pause.
Even his own top trade official seemed only vaguely aware the change was possible by the time Trump announced the reversal on social media. “It looks like your boss just pulled out the rug from under you and paused the tariffs,” Democratic Rep. Steven Horsford of Nevada told US Trade Representative Jamieson Greer during a hearing that was underway on Capitol Hill when Trump made his announcement. Greer had offered zero indication to that point the major shift was coming. Bessent and other officials insisted the decision to pause the new tariffs on all nations except China was not a backdown; instead, they framed the move as all part of Trump’s master plan to bring nations to the negotiating table. “It took great courage, great courage for him to stay the course until this moment,” said Bessent, who flew to Palm Beach last weekend for a lengthy discussion with Trump on the endgame of the tariffs.
Even as his advisers danced around it, though, the president acknowledged that the rising criticism, deepening angst and mounting losses in the financial markets contributed to his abrupt decision on Wednesday afternoon to impose a three-month pause on many of the tariffs.
“I thought that people were jumping a little bit out of line,” Trump told reporters.
Alarm over bond selloff
The administration’s economic team spent Wednesday morning intensely focused on the bond selloff that had intensified a day earlier and accelerated aggressively overnight, driving yields higher and, in effect, demonstrating the exact opposite of what would normally happen during such an unstable and volatile moment in the global economy.
Historically, Treasurys rally in moments of stock market selloffs as investors rush to shift assets to a global safehaven, the longstanding status due to the safety and liquidity provided by the US market.
Watching the inverse play out, then accelerate after unexpectedly weak demand at the first Treasury Department auction to take place since Trump’s announced his tariff regime, led to growing alarm. The sharp selling of Treasurys – coupled with low demand for a sale of new US Treasury debt – sparked further concerns that foreign countries were abstaining from buying new US Treasurys and selling the debt they had. Because bond revenue pays for the cost of government programs that tax revenue doesn’t cover, worries abounded that Trump’s broader agenda was in jeopardy.
In a television interview Wednesday, Bessent dismissed the moves as “uncomfortable, but normal.”
But for Bessent, whose finance career was deeply intertwined with the bond market and who has been fixated on driving down the 10-year yields in his cabinet post, the alarm relayed by senior Treasury officials was understood and reflected in the later conversation with Trump.
The president, who is a close monitor of his own coverage on television, had seen even some of his close allies issue dire warnings about the prospects of a recession as a result of the tariffs. He was watching Fox Business channel on Wednesday morning when JPMorgan Chase CEO Jamie Dimon said a recession was “a likely outcome” of an escalating trade war resulting from Trump’s tariff policies.
“Markets aren’t always right, but sometimes they are right,” Dimon told Fox Business’ Maria Bartiromo.
Executives light up White House phones
Inside the White House, telephone calls had been coming quickly from business executives, Republicans and other allies of the President urging him to reconsider his tariffs, but they received little indication a pause was in the works.
Executives had been lighting up 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 as trade hawks continued to promote Trump’s tariffs-at-all-costs approach on television as the market continued to sink.
Wiles, these sources said, had been particularly effective in convincing Trump that the market rout was costing considerable political capital that he would need for future agenda items, with lawmakers fielding increasingly angry constituent calls as the market continued sinking.
Bessent, whose conversation with Trump in Florida over the weekend focused on zeroing in on the overall goal of the tariffs, also appeared to assume more of a role in the public messaging, talking frequently about the dozens of countries now jockeying for trade deals.
“This was driven by the President’s strategy. He and I had a long talk on Sunday, and this was his strategy all along,” Bessent said on Wednesday.
Trump, however, acknowledged he’d been keeping a close eye on markets, calling their performance “glum” over the last few days.
A week after making a tariff announcement that upended the global trading system, the president stood outside the White House in front of three colorful race cars and reflected on what led to his retreat. He sought to take credit for a problem largely of his own making, saying his credibility was not eroded by the whiplash.
“You have to have flexibility,” Trump said. “I think in financial markets, because they change, look how much you change today.”
