WASHINGTON (AP) 鈥� The stock market was soaring and the sun was shining when President stepped out of the Oval Office on Wednesday afternoon. Less than two hours earlier, from his plans to increase tariffs on many U.S. trading partners, and after bracing for a global economic meltdown.
鈥淵ou鈥檝e got the markets seeing your brilliance,鈥� Sen. John Barrasso, a Republican from Wyoming, told the president.
Trump agreed. 鈥淣obody鈥檚 ever heard of it,鈥� he declared.
It was a typical bit of hyperbole that, in this case, was true. Even by the standards of Trump鈥檚 second term, the saga that had played out over the past week left the world struggling to catch its breath.
The Republican president, of his own doing, had single-handedly pushed the global economy with new tariffs. The stock market cratered, businesses tore up their plans and foreign leaders prepared for a future without the world's richest nation at the center of international trade.
And then Trump backed down. Seven days after announcing what would have amounted to America鈥檚 largest tax hike since World War II in an elaborate Rose Garden ceremony, he rolled back most of the tariffs in a surprise post on his social media website.
"I think the word would be flexible," he said later despite days of insisting that he wouldn't bend. 鈥淵ou have to be flexible.鈥�
Uncertainty lingers as trade talks continue
It was unclear what the president had accomplished, beyond the satisfaction of, in his words, having other countries 鈥渒issing my ass鈥� to try to talk him out of the tariffs. No new trade deals have been reached, although administration officials said negotiations are underway.
However, real damage has been done. The back-and-forth over tariffs shook confidence in U.S. leadership, exposed fractures within Trump鈥檚 team and rattled companies that rely on global sources for products and international customers for sales. Americans who use the stock market to save for retirement and college suffered days of angst.
The turmoil isn鈥檛 over yet, either. Trump's 10% blanket tariffs initially imposed on Saturday are now applied to dozens of nations. He also jacked up tariffs to 145% on imports from China, leaving the world between the first and second largest economies. (Trump and administration officials had originally pegged the rate at 125% on China, but an announcement from .) There are 25% tariffs on Canada and Mexico, America鈥檚 largest trading partners, as well as 25% taxes on imported autos, steel and aluminum.
Other tariffs 鈥� including 24% on Japan, 25% on South Korea, 20% on the European Union 鈥� are on hold for 90 days to allow for trade talks.
鈥淭his just accentuates the policy uncertainty and sense of unreliability Trump is creating,鈥欌�� said William Reinsch, a former U.S. trade official now at the Center for Strategic and International Studies. While Reinsch said it鈥檚 good news that Trump didn鈥檛 move forward with some of his highest tariffs, 鈥渉ow does anybody know that he won鈥檛 change his mind on Friday or next week?鈥�
Trump makes his announcement on 鈥楲iberation Day鈥�
U.S. flags were draped along the White House colonnade for a red-white-and-blue backdrop when on Wednesday, April 2.
鈥淢y fellow Americans, this is Liberation Day,鈥� he said. The president held up a poster listing the tariffs that he would slap on each country 鈥� 32% for Thailand, 49% for Cambodia, 26% for India, and on and on. People around the world squinted to decipher the numbers that would reset critical economic relationships.
Trump has been fixated on international trade for decades, long before entering politics. His central concern is trade deficits, meaning the U.S. imports more than it exports.
But the focus puzzles mainstream economists, who don鈥檛 view the situation with the same level of alarm. It鈥檚 no surprise, they said, that a rich nation like the U.S. would buy more than it sells, and they鈥檙e generally skeptical that tariffs alone would eliminate trade deficits.
However, Trump declared that it was a 鈥渘ational emergency鈥� that would allow him to push tariffs without congressional approval. His tariffs were not based on the import taxes charged by other countries but , a calculation that instantly discredited the policy with many economists and investors. Also baffling were the tariffs placed on Heard and McDonald Islands, which are mainly populated by penguins.
The day after the announcement, Trump jetted to Florida
鈥淭he markets are going to boom, the stock is going to boom, the country is going to boom,鈥� he promised while leaving the White House, the whirring rotors of Marine One sometimes overpowering his voice. 鈥淎nd the rest of the world wants to see if there is any way they can make a deal.鈥�
But the market was crashing, posting since the outbreak of the coronavirus pandemic five years earlier. And it didn't get any better as Trump attended a Saudi-funded tournament at his Miami golf course and participated in a candle-lit dinner for an allied political organization.
On the flight back to Washington on Sunday evening, Trump told reporters that he won a club championship.
鈥淚t鈥檚 good to win," he said. "You heard I won, right?鈥�
But around the country and the world, the fallout was spreading.
Fulcrum Coffee Roasters in Seattle braced for rising costs for beans from Southeast Asia and espresso machines from Italy. Stellantis, the automaker behind brands like Jeep and Ram, announced it would pause production at plants in Mexico and Canada, leading to temporary layoffs at other facilities in Indiana and Michigan, a reminder of how interconnected vehicle supply chains have become.
The Dutch division of Tata Steel said it would cut 1,600 employees, about a fifth of its workforce. Ireland Prime Minister Michael Martin said 鈥渢here is no way to sugar coat鈥� the situation as business with the U.S. started tapering off. Sri Lanka worried that its economic recovery would be derailed as its clothing industry faced new tariffs from its most important export market.
Trump faces growing pushback from his own party
The markets were still in a panic on Monday when an unverified report circulated that the president was considering a 90-day pause on the tariffs. Stocks briefly soared before investors realized the information was wrong.
鈥淲e鈥檙e not looking at that,鈥� Trump said as hopes for the rumored reprieve vanished.
By Tuesday, with fears of a recession growing, Trump鈥檚 closest advisers began publicly sparring with one another. Billionaire entrepreneur Elon Musk, who leads the administration鈥檚 efforts to trim the size of government, openly questioned the wisdom of the tariffs, which would raise costs for his electric automaker Tesla. White House trade adviser Peter Navarro insisted that Musk 鈥渄oesn鈥檛 understand鈥� the situation. Musk fired back that Navarro was 鈥渢ruly a moron鈥� and 鈥渄umber than a sack of bricks.鈥�
returning to the Capitol for the workweek were peppered with questions about the tariffs and what they would do in response. Some began voicing support for legislation meant to rein in a president鈥檚 tariff powers, before the White House struck back forcefully with a veto threat.
Sen. Ron Johnson of Wisconsin was asked on Tuesday if he understood Trump鈥檚 strategy, and responded by asking 鈥渄oes anybody?鈥� Some of his state鈥檚 premier companies like Kohl鈥檚 expected higher costs, while its dairy farms expected to struggle to sell milk and cheese. Harley-Davidson was a target of planned reciprocal tariffs by the European Union.
Sen. Thom Tillis of North Carolina was even more blunt that day during a hearing with Trump鈥檚 top trade representative, Jamieson Greer. If the tariff plans don鈥檛 work, he said, 鈥淚鈥檓 just trying to figure out whose throat I need to choke.鈥� His state鈥檚 farmers, who raise hogs and grow tobacco among other products, feared getting caught in the crossfire of a trade war, while local manufacturers and tech companies could face higher prices on what they export to foreign consumers.
Treasury Secretary Scott Bessent, a former hedge fund manager with intimate knowledge of the financial sector, held a round of meetings on Capitol Hill, including a lunch with Sen. John Kennedy, a Republican from Louisiana.
Kennedy had grown concerned about the tariffs, and he said they 鈥渢alked very frankly.鈥� He was part of a group of senators who sat down for an interview with Sean Hannity on Tuesday night in hopes of swaying Trump鈥檚 mind through one of his favorite Fox News hosts.
Trump had been about the tariffs and the market collapse by saying 鈥渟ometimes you have to take medicine to fix something.鈥�
Kennedy wasn't convinced, even if he shared the president's concerns about unfair trade practices.
鈥淲e don鈥檛 know if the medicine will be worse than the disease,鈥� he said.
Trump retreats, and aides call it part of the strategy all along
The tariffs on allies like Japan, South Korea and the European Union took effect at 12:01 a.m. on Wednesday, and there were no signs that Trump would back down when the sun came up in Washington.
鈥淏E COOL! Everything is going to work out well,鈥� he posted on Truth Social.
Trump also wrote: 鈥淭HIS IS A GREAT TIME TO BUY!!!鈥� 鈥� advice that turned out The president later said he'd been talking with his aides that morning about pausing the tariffs, an announcement that would send the stock market soaring.
Greer was back on Capitol Hill for another hearing when Trump made his announcement.
Rep. Steven Horsford, a Nevada Democrat, asked if Trump's trade representative knew that the tariffs he had just spent at least two hours defending had been paused.
鈥淚 understand the decision was made a few minutes ago,鈥� Greer said.
Horsford erupted, saying 鈥渢his is amateur hour, and it needs to stop.鈥�
At the White House, press secretary Karoline Leavitt scolded reporters for not understanding the president's plans.
鈥淢any of you in the media clearly missed The Art of the Deal,鈥� she said, referencing Trump鈥檚 book from 1987. 鈥淵ou clearly failed to see what President Trump is doing here.鈥�
But the administration sent mixed messages even as it rolled back the tariffs.
Bessent said the decision had nothing to do with the markets.
鈥淭his was driven by the president鈥檚 strategy,鈥� he told reporters outside the West Wing. 鈥淗e and I had a long talk on Sunday, and this was his strategy all along."
Trump later contradicted Bessent.
鈥淚 was watching the bond market," he said. 鈥淭hat bond market is very tricky.鈥�
Despite the retreat, Trump showed no signs of regret. He was seeing dollar signs as he chatted with championship race car drivers in the Oval Office.
posted by one of his aides, the president gestured to two corporate executives.
鈥淗e made $2.5 billion today, and he made $900 million,鈥� he said. 鈥淭hat鈥檚 not bad.鈥�
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Reporting was contributed by Scott Bauer in Madison, Wisconsin, Martha Bellisle in Seattle, Stephen Groves in Washington, Jamey Keaten in Geneva, Bharatha Mallawarachi in Sri Lanka, Brian Melley in London, Molly Quell in Amsterdam and Gary Robertson in Raleigh, North Carolina.
Chris Megerian And Seung Min Kim, The Associated Press
