Over the past week, President Trump was urging calm in facing the financial chaos he created and resisting his calls to rethink his approach.
“I know what I do against hell,” he told the Republicans on Tuesday as the huge definitions imposed on global markets. “Be great!” He said in a post on social media on Wednesday morning. “Everything will work well.”
At 9:37 am on Wednesday, the president was still optimistic about his policy, as he posted on the social truth: “This is a great time to buy !!!”
But in the end, it was the markets that led him to the opposite of the path.
Economic unrest, especially the rapid rise in government bond returns, caused Mr. Trump on Wednesday afternoon and the mutual definitions of most countries have stopped over the next ninety days, according to four people who have direct knowledge of the president’s decision.
“Well, I believed that people were jumping a little outside the line. They were getting YipPy, as you know, they were receiving a bit, they were a little afraid,” Mr. Trump told reporters.
Behind the scenes, the members of the Mr. Trump team were afraid of the financial panic that could get out of control and potentially destroy the economy. Treasury Secretary, Scott Bessin and others in the president’s team, including Vice President JD Vance, were pressing for a more organized approach to the trade conflict that focuses on isolating China as a worst representative while he still sends a broader message that Mr. Trump was serious about cracking on trade balance.
After reflecting on social media, Mr. Trump’s team was put in an unenviable position on the attempt to rotate the media that was the plan all the time, and it is a wonderful strategy directly from the pages of the best -selling book for the president, “the art of the deal”. Mr. Bessent went to the point that the bond market paid the change.
When Mr. Trump went out to explain his decision on Wednesday, Mr. Pesin and Caroline Levitte, the White House press secretary, underwent the increasing market and says he was behaving “instinctively, more than anything else.”
Many senior consultants and officials in Mr. Trump were not aware of this main shift in politics until the last minute, because soon on Wednesday morning, Mr. Trump still indicated that he was adhering to his previous plan.
A person familiar with the situation said.
Mr. Bessent played an important role in directing the president towards a temporary stop. But the real credit, Mr. Trump’s advisers recognize, must go to bond markets. Mr. Trump’s decision was to be afraid that the customs tariff gambling may quickly turn into a financial crisis. Unlike previous incidents over the past twenty years – the 2008 global financial crisis in 2020 – this crisis was directly attributed to only one man.
Market collapse
On the day Mr. Trump announced his plan to prepare definitions, he promised “to make America rich again.”
But the details and goals of the plan remained blurry. In the period before the announcement of the customs tariff last week, Mr. Trump’s economic team discussed until the last minute about the form that the definitions should take, with Mr. Pesent and the Minister of Trade Howard Lootnick in particular on more limited tariffs, according to two people familiar with the plans.
Peter Navarro, the White House Trade Adviser, was the most aggressive for Mr. Trump’s advisers, and insisted on the customs tariff strategy that he claimed would create a revolution in American manufacturing. The American Trade Representative Office reached its own form to calculate the customs tariff rates for other countries, based on customs tariff rates in addition to an estimate of other commercial barriers. But the president eventually decided to go with a formula based on the trade deficit, two people said familiar with the talks.
When the customs duties finally entered into force last Wednesday, the markets erupted.
By Sunday, Mr. Pesin decided that he needed a private audience with the president. In less than 24 hours, the markets were reopening and investors expected the “Black Monday”.
Mr. Pesin rode with Mr. Trump to Washington in the first air force. During the trip, Mr. Pesin advised the president to focus on negotiating with other countries, saying that Mr. Trump is the most negotiator there is, four people mentioned in the discussion. But he also stressed that Mr. Trump needs to clarify the end of his plan’s plan because the markets need more certainty.
The people said that Mr. Trump retreated back, stressing that the pain was “short -term”, one of the people said. But Mr. Pesin said this may mean several months in terms of market.
It seems that the president only absorbed part of the message. On Monday morning, he formulated a social publication of the truth to say “talks” would have been held with the countries; He changed to say that they are “negotiating.”
By the afternoon, he told reporters: “Every country wants to negotiate.”
But there was no coherent expression about the end of the game: Did the president want to use fees as a negotiating tactic to reduce better deals for the United States? Or was he intending to leave them in place as a sharp tool to raise revenues and force manufacturing to the United States?
Looking for clarity
Although Mr. Trump’s strategy of definitions was still unclear, he will move strongly to impose it should not be a surprise.
Mr. Trump carried a campaign to put a global tariff for the basic line, and his advisers explained that the president would follow his instincts after a first term in which Mr. Trump believed that his advisers tried to prevent him at every turn.
He took office for the second time, Mr. Trump told the advisers that he wanted to do this on his way this time. He surrounded himself with consultants who are believers in his instincts, and he repeatedly said that he sees customs duties as a tool to save the economy from foreign countries that have benefited from the United States for decades.
Investors and executives at Wall Street and the main donors persuaded themselves that Mr. Trump was deceiving, or the most aggressive tariff proposals will be talked. Some of his advisers tried. Mr. Lutnick has argued for almost immediate car industry exemptions. Others wanted exemptions for goods that are not sufficiently produced in the United States, such as coffee.
Meanwhile, economists have warned that the harsh customs tariff, by raising the prices of imported goods, would undermine another promise in another campaign: Mr. Trump would lead to low inflation.
But Mr. Trump has a theory about the tariff that has been scared for 40 years, which are frozen in place and resistant to data that contradict his intestine. For many years, when he was presented with statistics that do not correspond to his instincts, people are demanding alternative information that supports his beliefs.
So, he traveled forward, although his advisers found themselves struggling to communicate with the audience about a policy they did not fully understand. The assistants held multiple meetings with Mr. Trump and his senior advisers to try to find a way to persuade the public that economic sanctions were a good idea.
For a while, Mr. Trump’s dynamic definitions have created more – global leaders come to him, and as he said on Tuesday night, “Kiss my ass” in search of deals. Administration officials said that more than 75 countries had contacted them.
But the warning signs have become very severe so that they cannot be ignored.
The opposite path
On Wednesday morning, Mr. Trump encouraged the Americans to buy shares and urge companies to move to the United States. It was not clear, at that stage, hours later, the path would suddenly change and put a 90 -day stand on many definitions. Financial markets rose after reflection, leaving questions about whether Mr. Trump’s previous recommendation for the purchase opportunity was a sign that some investors may have been used to benefit from the high stock prices.
But shortly after Mr. Trump published his message on social media, he met in the Oval Office with Mr. Bessin and Mr. Lottennik and Kevin Haysit, director of the National Economic Council. They discussed with the president the treasury return for 10 years, focusing on concern about the health of the wider US financial system. Mr. Trump, in particular, understood, which means high bond returns for banks and lending them in the long run, a subject that he understands closely since his years that runs a real estate company.
The definitions had sparked a sharp sale in American government bond markets The dollar, which investors usually sees safe assets in times of turmoil. After Mr. Trump announced the new definitions last week, the economists in Wall Street quickly raised their expectations for inflation and reduced growth, with many warnings about the recession. The trillion dollars disappeared from the market value of securities within days.
At 1:18 pm on Wednesday, Mr. Trump has in fact announced that he will back down from the “mutual” definitions for 90 days, as the customs tariff for China increased to 125 percent. The temporary suspension, in addition to leaving a 10 percent tariff rate in most countries, was a copy of what a number of people to Mr. Trump urged him to put it for several days.
Speaking to the correspondents shortly after Mr. Trump announced the reflection, Mr. Pisent and Mrs. Levitte tried to create the impression that this was the culmination of a careful plan – to isolate China as the main perpetrator who causes pain on American workers.
“This was his strategy all the time,” said Mr. Pesin.
Mrs. Levitte, the White House press secretary, attempted to framing the rear policy as a genius to negotiate.
She said: “Many of you were absent in the media clearly from” the art of the deal “, as you clearly failed to know what President Trump is doing here.” ))
Mr. Trump, Stephen Miller, consulted update to another level on X: “You were seeing the greatest economic strategy of an American president in history.”
Mr. Pesin claimed that a 90 -day pause was the idea of Mr. Trump and insisted that the decision had nothing to do with trillions of dollars from the American wealth that was eliminated from the stock market after announcing the president’s tariff last week.
“I have nothing to say, and we had already a good auction for 10 years today.”
Mr. Pesen said that the president was stopping the definitions because the administration was receiving many requests to negotiate, and that all negotiations would be “dedicated” and therefore “takes some time.”
The Treasury Secretary did not respond directly to a question about the reason for trusting investors that this is the last word of Mr. Trump after many changes.
Mr. Trump’s actions cover only 90 days. As for any additional exemptions for the tariff, the president refused to give clarity many investors.
On Wednesday, he was asked how to make a decision on any other exemptions, Mr. Trump said: “In instinctive, more than anything else. I mean, you cannot take a pencil to paper. It’s really a instinct, I think, from anything else.”
