section_path: "Reciprocal" tariff policy/Walk back
section_name: Walk back
paragraph_text: Walk back
  
  The announcement of the tariffs led to a market crash. On the morning of April 9, the head of FX at Deutsche Bank told investors, "We are witnessing a simultaneous collapse in the price of all US assets including equities, the dollar... and the bond market."
  
  That afternoon, Trump announced on Truth Social that reciprocal tariffs above 10%, which had gone into effect that morning, would be paused for 90 days for all countries except China. China's minimum tariff rate was increased to 145%, while imports from all other countries were sustained at the 10% baseline tariff. Other global tariffs on products like cars, steel, and aluminum remained in effect. The administration exempted goods that were already in transit and that arrive before May 27, 2025, from the new tariffs.
  
  Politico reported that Bessent had flown to Florida a few days earlier to lobby Trump against the tariffs, warning him that the stock market would continue to decline unless he changed course. The Wall Street Journal reported that while Navarro was busy meeting with Hasset on the morning of April 9, Bessent and Lutnick took advantage of Navarro's absence to meet with Trump again and convince him to pause the tariffs. After the walk back, Bessent said the pause was meant to provide time for bespoke negotiations with each trading partner. Trump told reporters, "I thought that people were jumping a little bit out of line... You know, they were getting a little bit yippy, a little bit afraid". He said he had been watching the bond market, which had shown signs of crashing the night before.
  
  Stocks surged within minutes of the announcement, with the S&P 500 rising 9.52% for its largest one-day gain since 2008. Citi analysts warned, "We do not see the scenario as being as encouraging as markets do," noting that the remaining tariffs still represented a substantial new burden. Analysts at Bloomberg Economics estimated the US's average tariff rate would still rise to 24% from 2% the year prior. Pacific Investment Management, one of the world's biggest bond investors, kept estimates of a US recession at 50/50 "even if the 90-day reprieve turns into a longer stint". On April 11, the administration announced it would further exempt electronics such as smartphones and computers from the reciprocal tariffs, but warned they may be subject to future Section 232 tariffs. Chinese technology imports would continue to face a 20% tariff.
  
  At a May 28, 2025 press conference, Trump was asked about his reaction to the term TACO, coined by Financial Times commentator Robert Armstrong, which stood for Trump Always Chickens Out in reference to his tariffs and reversals. Trump responded by saying that it was part of his tactic: "It's called negotiation."