US President Donald Trump (Photo: Reuters).
On April 9, US President Donald Trump unexpectedly announced a three-month suspension of the reciprocal tax plan after lobbying efforts from politicians and businesses, as well as negative market reactions.
“They started to worry. They got nervous, a little scared,” Mr. Trump explained, speaking about the reaction from businesses, political allies and financial markets over the past week.
Even for a president known for his unpredictable policy changes, the reversal came as a surprise. Just a day earlier, Trump had been defending his “reciprocal” tariffs and had shown no signs of backing down, while his trade representative testified before Congress on the merits of the policy.
Days of pressure from Republican lawmakers, business leaders and even close associates have failed to sway Mr Trump, who last week declared emphatically: “My policies will never change.”
However, by April 9, the negative developments in the bond market – which is considered a safe haven for investors – made it impossible for the White House to ignore.
Growing concerns at the US Treasury about a sharp decline in government bonds were a key factor in Mr Trump’s decision to suspend the tariff plan, according to three sources familiar with the matter.
Treasury Secretary Scott Bessent raised the issue directly with Trump in a meeting shortly before the White House announced the delay. Several senior economic officials had also warned the president earlier in the day about the bond market sell-off.
Not long before, Mr. Trump had been tweeting about the stock market, seemingly not considering a tax deferral. But by the afternoon of the same day, he admitted that he had been closely monitoring the volatile developments in the bond market.
“The bond market is quite complicated, I’ve been following it. Last night I saw a lot of people starting to feel uncomfortable,” he said.
This is a quick, decisive decision, like the style of a businessman.
Even some of Mr. Trump’s senior advisers only learned about the decision to postpone taxes through a post on the social network Truth Social.
At the time, US Trade Representative Jamieson Greer was still testifying before Congress, making absolutely no mention of the possibility of a policy change.
Mr Bessent and other officials tried to portray the move not as a retreat, but as “part of a larger strategy” to bring countries to the negotiating table. But Mr Trump later acknowledged that calls and negative reactions from financial markets were factors in his decision.
“I think people have overreacted a little bit,” he said.
Behind-the-scenes lobbying efforts
Government economic officials spent the morning of April 9 closely monitoring the sharp bond sell-off that had intensified the day before.
The move is contrary to tradition, when investors should have poured into government bonds in times of uncertainty.
In his subsequent conversation with Mr Trump, the Treasury Department’s concerns were fully reflected. The president himself, a close watcher of the television news media, has also seen warnings from even close allies.
When JPMorgan Chase CEO Jamie Dimon declared on Fox Business that a recession was a “likely scenario” due to the escalating trade war, Mr. Trump was watching.
Major business leaders, Republican lawmakers and other allies have repeatedly called Chief of Staff Susie Wiles, Vice President JD Vance and Secretary Bessent, urging Mr. Trump to reconsider the tariff plan.
Ms. Wiles was particularly influential in convincing Mr. Trump that the market shock was sapping the political strength he needed to move forward on his priorities, the source said.
Mr. Bessent — who had a lengthy discussion with Mr. Trump in Palm Beach last weekend — later took the initiative to take on a public communications role, asserting that this was a move that “was part of the President’s strategy from the beginning.”
Still, Mr Trump admitted that he has been watching the market closely. “The market has been a little bit lacklustre these past few days,” he said.
“You have to be flexible. The financial markets change every day – you saw that today,” he said.
