Just one week after Donald Trump unleashed his global tariffs during his so-called ‘Liberation Day’, he has reversed the decision for 90 days – except in China.
Stock markets around the world had plunged to almost record low levels after tariffs went into effect – but just hours before he announced the pause, he gave his followers what appeared to be financial advice.
‘THIS IS A GREAT TIME TO BUY!!! DJT,’ the US President wrote on his Truth Social account.
The markets soared shortly after Trump’s 90-day pause announcement, much to the relief of stockbrokers and those on Wall Street and in the City.
But US Representatives are now asking Trump and the Republican party how he could give trading advice before making such a major international economic decision.
Why has Trump paused the tariffs?
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Rumours began swirling that Trump would backtrack on the tariffs earlier this week after roughly $10 trillion was wiped from the global stock market.
On Monday, the White House denounced a report that the administration was considering such a move, calling it ‘fake news.’
But two days later, Trump announced he was going to pause the tariffs, telling reporters he had considered doing so for several days.
When outlining his reasons for the pause, he told reporters: ‘I thought people were jumping a little bit out of line, they were getting yippy, you know.’
The European Union said they would pause their planned tariffs on US goods after the pause was announced, but said ‘all options remain on the table’.
But the trade war with China has continued, with Trump hiking tariffs again up to 125% from the 104% that kicked in on Wednesday.
The White House later said the reversal was done because it was ‘his strategy all along’, and showed the ‘art of the deal’.
U.S. Treasury Secretary Scott Bessent said the pullback had been the plan all along to bring countries to the bargaining table.
Is it market manipulation?
It’s too early to tell, but the Republican party and Trump have faced accusations that they were trying to manipulate the markets, with Democrat Senator Adam Schiff urging Congress to investigate.
Market manipulation is defined as interference with the market to gain unfair advantages, such as manipulating prices or using unfair tactics to change market conditions to be more favourable for an individual or group.
Days ago, questions were raised about the stock purchases of Congresswoman Marjorie Taylor-Greene, who bought stocks in firms which plummeted in price and popularity after Trump’s announcement. She has not responded.
Trump also welcomed Charles Schwab, a major Wall Street figure, into the Oval Office and chatted about how he had made ‘billions’ after the stock market rose again.
Those found guilty of market manipulation can pay hefty fines or even be imprisoned.
Senator Schiff asked: ‘Who in the administration knew about Trump’s latest tariff flip-flop ahead of time? Did anyone buy or sell stocks, and profit at the public’s expense? I’m writing to the White House – the public has a right to know.’
Representative Steven Horsford spoke to Trump’s trade representative Jamieson Greer shortly after the pause was announced and said: ‘This is amateur hour and it needs to stop.
‘How are you in charge of negotiating if the president is tweeting about this from wherever the hell he is? Did you know that this was happening? Is this market manipulation?’
What has the White House said?
White House press secretary Karoline Leavitt said the rowback was part of Trump’s ‘negotiating strategy’.
She claimed the ‘news media clearly failed to see what Trump is doing here’.
‘You tried to say that the rest of the world would be moved closer to China, when in fact, we’ve seen the opposite effect,’ she told reporters.
‘The entire world is calling the United States of America, not China, because they need our markets.’
How has the stock market reacted to the freeze?
Wall Street workers have given a mixed reactions to Trump’s tariff freeze. Gennadiy Goldberg, head of US rates strategy at TD Securities, previously said markets wanted to see a ‘truce’ in the trade war.
‘Markets more broadly, not just the treasury market, are looking for signs that a trade de-escalation is coming. Absent any de-escalation, it’s going to be difficult for markets to stabilise,’ he said.
But Bill Ackman, a hedge fund billionaire and Trump supporter, called for a pause shortly before the freeze was announced: ‘Our stock market is down. Bond yields are up and the dollar is declining. These are not the markers of successful policy.’
Hours later, Ackman praised Trump and said he had ‘brilliantly executed’ his ‘plan’.
Markets are still recovering today, with the New York Stock Exchange set to open around 2.30pm UK time.
How has China reacted to not being part of the freeze?
China does not appear interested in entering into a bargaining negotiation, as some other countries have started doing.
Foreign Ministry spokesman Lin Jian said: ‘If the US truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit.’
Other sectors of the Chinese government have reacted more harshly. The Chinese Ministry of Culture and Tourism issued a travel advisory asking its citizens to evaluate the risks of visiting the US as tourists and to exercise caution.
The advisory came shortly after the announcement of the tariff hike and cited the deterioration in economic and trade relations as well as the ‘safety situation’ in America.
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