Associated Press

WASHINGTON — Facing a global market meltdown, President Donald Trump on Wednesday abruptly backed off his tariffs on most nations for 90 days even as he further jacked up the tax rate on Chinese imports to 125%.

It was seemingly an attempt to narrow what had been an unprecedented trade war between the U.S. and most of the world to a showdown between the U.S. and China. The S&P 500 stock index jumped 9.5% after the announcement, but the drama over Trump’s tariffs is far from over as the administration prepares to engage in country-by-country negotiations. In the meantime, countries subject to the pause will now be tariffed at 10%.

The president hit pause in the face of intense pressure created by volatile financial markets that had been pushing Trump to reconsider his tariffs, even as some administration officials insisted the his reversal had always been the plan.

As stocks and bonds sold off, voters were watching their retirement savings dwindle and businesses warned of worse than expected sales and rising prices, all a possible gut punch to a country that sent Trump back to the White House last year on the promise of combating inflation.

The global economy appeared to be in open rebellion against Trump’s tariffs as they took effect early Wednesday, a signal that the U.S. president was not immune from market pressures. By early afternoon, Trump posted on Truth Social that because more than 75 countries had reached out to the U.S. government for trade talks and had not retaliated in meaningful ways, “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”

Trump later told reporters that he pulled back on many global tariffs — but not on China — because people were “yippy” and “afraid” due to the stock market declines. He added that while he expected to reach deals, “nothing’s over yet.”

The president said he had been monitoring the bond market and that people were “getting a little queasy” as bond prices had fallen and interest rates had increased in a vote of no confidence by investors in Trump’s previous tariff plans.

“The bond market is very tricky,” Trump said. “I was watching it. But if you look at it now, it’s beautiful.”

The president later said he’d been thinking about his tariff pause over the past few days, but he said it “came together early this morning, fairly early this morning.”

Asked why White House aides had been insisting for weeks that the tariffs were not part of a negotiation, Trump said: “A lot of times, it’s not a negotiation until it is.”

The 10% tariff was the baseline rate for most nations that went into effect on Saturday. It’s meaningfully lower than the 20% tariff that Trump had set for goods from the European Union, 24% on imports from Japan and 25% on products from South Korea. Still, 10% represents an increase in the tariffs previously charged by the U.S. government. Canada and Mexico would continue to be tariffed by as much as 25% due to a separate directive by Trump to ostensibly stop fentanyl smuggling.

Treasury Secretary Scott Bessent said that the negotiations with individual countries would be “bespoke,” meaning that the next 90 days would involve talks on a flurry of potential deals. Bessent, a former hedge fund manager, told reporters that the pause was because of other countries seeking talks rather than brutal selloffs in the financial markets, a statement later contradicted by the president.

“The only certainty we can provide is that the U.S. is going to negotiate in good faith, and we assume that our allies will too,” Bessent said.

The treasury secretary said he and Trump “had a long talk on Sunday, and this was his strategy all along” and that the president had “goaded China into a bad position.”

Commerce Secretary Howard Lutnick later seemed to contradict the president’s account by saying it was “definitively” not the markets that caused Trump to pause the tariffs, saying that requests by other nations to negotiate prompted the decision.

Prior to the reversal, business executives were warning of a potential recession caused by his policies, some of the top U.S. trading partners were retaliating with their own import taxes and the stock market was quivering after days of decline.