Trump’s tariff u-turn: ‘This is a power trip on a global scale’
Donald Trump reversed his tariffs plan less than 24 hours after it was implemented, now claiming a u-turn was part of a grand plan. What happens next to his grand plan to make America rich again?
Listen to this article
Read time: 4 mins
In brief…
- Donald Trump lifted tariffs, other than a baseline 10% on all countries (and apart from China) less than a day after his scheme saw markets crash around the world.
- The News Agents say the president, who claims he reversed his decision because others were “queasy” about the impact, is the one who was spooked by the fallout.
- They say Trump is now looking for an “exit ramp” so he can leave the plan behind him.
What’s the story?
The reason Donald Trump rolled back tariffs less than 24 hours after they dropped? People were getting "yippie", the president said.
Markets plummeted on 9 April as import taxes were applied to products from around the world entering the US, prompting Trump to rethink at the last moment. Imports will be subject to a baseline tariff of 10% during a 90-day pause, except for China which will now face a 125% rate.
A 25% import tax will also remain on aluminum, steel and cars entering the US.
Members of Trump's top team claimed that this u-turn had been part of his strategy all along, with White House officials stating his actions showcased "the art of the deal".
But Trump later told reporters it was due to the US bond market being "very tricky", adding that "people were getting a little queasy”.
“This is him saying the quiet part out loud and revealing that he was spooked by the markets being so troubled,” says Emily Maitlis.
“But what is interesting is that he has now sent out all his henchmen to say this was the plan all along.”
Markets rebounded on Thursday (10 April), but to levels well below where they had been before the tariffs were introduced.
What next for Trump and his tariffs?
Trump's tariffs have been paused for 90 days, according to the White House and everyone involved in the administration, but The News Agents believe this could be the end for them.
"I think he has been warned off, and he's trying to find an exit ramp from which he can leave this particularly calamitous journey that he's embarked upon," says Jon Sopel.
"Donald Trump always wanted this to be about the US and China – so why has the rest of the world got caught up in this? Because he wanted to do something huge. The markets have reacted, and he's now scaled it back.
"I do not believe that in 90 days, given the turmoil there was on the markets over the past few days, he can bring them back."
Emily says, if nothing else, Trump will have enjoyed the attention he's received from world leaders picking up the phone to "beg" for a trade deal.
"We know that this is a power trip on a massive global scale," she says.
"He has painted this as a capitulation on their behalf, which has allowed him then to row back from his iron fisted position.
"Everything Trump says, at any point, may obviously not happen, and I do feel that's where we are with the China tariff."
But while the u-turn on tariffs may seem like a positive, for now, Emily says the uncertainty will do little to inspire US businesses.
"Would you do anything long term whilst Trump was in power, as a business? Would you do anything that required any full planning whatsoever?" She asks.
"Of course you wouldn't."
Additionally, Emily and Jon describe the situation inside Trump's administration as "open warfare", following a very public bust-up between Elon Musk and Peter Navarro, senior counsellor to the President for trade and manufacturing.
How does this affect the UK?
The UK was facing Trump's baseline tariff of 10%, which remains unchanged – but in backtracking on his plans for additional tariffs, it does potentially ease other pressures.
"This whole thing hasn't actually made things any easier for us, except by taking the rest of the global chaos away,| says Emily.
A predicted trade war would have had hugely negative impacts across global markets, and this could be avoided or lessened following Trump's change of heart.
Additionally, they suggest the UK could secure a trade deal with the US with fewer concessions than it may have had to make just days ago.
“Trump has still got a lot to resolve and unpick from what he started himself,” says Jon.
“This was going to be the worst financial crisis since the 2008 financial crash, since the pandemic, but this was authored by one man, and one man alone.”