Why did the tariffs suddenly suspend? Several insiders revealed

Author: Sun Zhuo, Yicai Global

On Wednesday (9th), U.S. President Trump explained the sudden announcement of a three-month suspension of "reciprocal tariffs" and said that the outside world was "a little overreacting" on the issue of tariffs.

"They are starting to get very noisy." Trump said when explaining the increasing criticism of the White House over the past week, "They are a little noisy and a little scared."

Trump's reversal of attitude that day surprised the outside world, because a day ago, despite the advice of Republican colleagues, business executives and even Trump's inner circle for several consecutive days, his position did not seem to be shaken. In fact, when Trump made the suspension statement on Wednesday, U.S. Trade Representative Greer was testifying in Congress on tariffs.

“It looks like your boss just pulled the rug out from under you and announced a suspension of tariffs,” Nevada Democratic Rep. Steven Horsford told Greer at the hearing as Trump made the announcement.

Greer later said he knew there might be a policy change Wednesday morning. But when asked directly if he knew the policy was about to take effect, he did not answer, but said the administration was discussing “various options.”

图源：彭博资讯

Really because of the bond market?

Trump said on Wednesday afternoon that he had been closely watching the turmoil in the bond market.

"The bond market is very tricky, and I've been watching it," Trump said after making the tariff suspension announcement. "The bond market is doing very well right now. But yes, I saw people were a little uneasy last night."

Marko Kolanovic, former chief global strategist at JPMorgan Chase, said a day earlier that the collapse of the bond market "may well push the White House to the brink of collapse."

Kolanovic said late Tuesday that he believed the government would revoke some of the tariffs announced last week, meaning that President Trump was about to make concessions on tariffs.

"When the bond market collapsed, their (White House) whole narrative collapsed," Kolanovich said after Trump announced the tariff suspension on Wednesday. "The bond market may have forced them to do this."

U.S. Treasury Secretary Scott Bessant and other officials insisted that the decision to suspend tariffs was not a retreat, but rather part of President Trump's overall plan to get countries to the negotiating table.

"It takes a lot of courage, a lot of courage to stick with it until now," said Bessant, who went to Mar-a-Lago in Palm Beach last weekend and had a long discussion with President Trump about the final outcome of tariffs.

On Wednesday morning, the Trump administration's economic team was reportedly paying close attention to the wave of U.S. bond selling. The sell-off intensified the day before and accelerated sharply overnight, pushing up U.S. bond yields.

Concerns about the bond market within the U.S. Treasury Department were a core factor in Trump's decision to suspend tariffs, according to three people familiar with the matter.

Treasury Secretary Bessant expressed those concerns directly to Trump at a White House meeting on Wednesday morning, after which Trump announced the decision to suspend tariffs, the people said.

How to dissuade Trump from the White House

From within the White House, corporate executives, Republicans and other allies of Trump have reportedly been calling to urge him to reconsider tariffs, and business executives have called White House Chief of Staff Susan Wiles and Treasury Secretary Bessant to ask them to plead directly with Trump.

Wiles was particularly effective in convincing Trump that the stock market crash was costing him a lot of political capital needed for his future agenda, the sources said. In addition, as the market continued to fall, lawmakers received more and more calls from constituents who were angry about it.

Treasury Secretary Bessant said his conversations with Trump over the weekend in Florida focused on the overall goals of the tariffs.

"This (suspending tariffs) is driven by the president's strategy. He and I had a long conversation on Sunday, and this is always his strategy," Bessant said Wednesday.

Trump said the plan "came together this morning after a meeting with Commerce Secretary Lutnick and Treasury Secretary Bessant." "We wrote this plan from the heart," Trump said.

Bessant added that Trump will be "personally involved" in all negotiations to seek concessions from all sides.

Bessant did not say what might happen after the 90-day suspension period ends, but he said the U.S. government will continue discussions with other countries in the meantime. For example, he said U.S. government officials will meet with Vietnamese representatives on Wednesday.