And so suddenly the Donald Trump decided to do back to his ambitious plan for extensives duties On the planet, announcing a 90 -day freezing, all over the world, except for China. Beijing is called upon to face 125%duties.
‘They had begun to grumble’, Trump said, explaining the growing criticism of the White House in the last week regarding duties. ‘EThey had begun to be anxious, they were scared a little. “
What happened and Trump turned 180 degrees just 13 hours after his sweeping duties came into force?
Until 24 hours ago, Donald Trump seemed determined to ignore world warnings and insist on imposing duties that threatened to cause world economic shock. But the market pressurethe concern for recession And a television excerpt with Wall Street’s strongest banker was enough to turn the game in just 13 hours.
By posting on social media, the Trump announced that it freezed so -called “reciprocal” duties imposed on imports from nearly 60 countries and the European Union. The announcement came just 13 hours after the duties were implemented. Trump implied that market disruption played a role in his decision. OR Chinawhich was included in the original reciprocal duties, was not excluded from the suspension.
On the contrary, the Trump announced an increase in duties for Chinese products to 125% (from 104%). This decision followed Beijing’s announcement for retaliation, with a duty of 84% on US products.
Why did Trump back? Scared by American bonds
As you mention in his analysis the Bloombergthe implementation of reciprocal duties caused a great deal of disruption to the financial markets and reinforced fears of recession. Trump was confronted with intense pressure from businessmen and investors to recall.
He said that the purpose of the suspension is to give the US trade partners time to negotiate. The American side wants countries to reduce their own duties, remove trade in trade, such as quotas, subsidies and incomplete intellectual protection.
“People were a bit exaggerated, they had begun to be scared,” the president commented on reporters at the White House. ‘We have to be flexible’he added, acknowledging that his deafening announcement of generalized duties last week “terrified” investors and made them “nervous”.
According to analysts, the reason the president changed attitude seems to have been the Rebuildings in the market for US government bonds. Initially, investors fled to this “safe” choice, but soon began to unload US government bonds.
Clear message from investors
The president also appears to have retreated in front of the Investors and Business Circle Warnings in the US. According to his information CNBCallegedly taken seriously his interview with Jamie DimonManaging Director of JP Morgan. Dimon had estimated that the increase in duties is very likely to lead the economy to recession.
“It’s clever, an economic mind – did a fantastic job at the bank”, Commented by Donald Trump, who eventually joined his views.
A ‘strategic’ backlash – what will happen after the suspension of duties
After showing power for about ten days, Donald Trump made 180 degrees turn within just a few hours.
To prevent rumors of a lack of plan, the president and his supporters tried to present the decision as part of a strategy.
“This was his strategy from the beginning”, assured Finance Minister Scott Bessed.
If there are no agreements by the beginning of July, When the 90 days expires, duties may come back. But there is also the possibility of a new extension – Trump has already postponed the imposition of duties in the past, e.g. For Mexico and Canada.