In just 18 hours, President Donald Trump reversed one of the most sweeping tariff offensives in US history, calmed panicking global markets, and turned a messy trade war into a kind of economic siege against China.
According to a Washington Post report, the abrupt shift — shaped by late-night TV, phone calls from Republican senators, pleas from foreign leaders, and alarming financial data — marked one of the most consequential pivots of Trump’s second term. It also underscored how chaos and instinct, rather than planning or policy, are often the drivers behind Trump’s biggest moves.
But by sparing most US allies from higher tariffs while ratcheting them up on Chinese goods to a record 125%, Trump managed to isolate Beijing economically, setting up a direct confrontation with President Xi Jinping .
Why it matters
Step one: Fire all cannons
The drama began with escalation. On Tuesday, the US enacted sweeping new tariffs — some of the steepest since the Smoot-Hawley Act of the 1930s — on imports from dozens of countries. Wall Street tanked. Bond yields spiked. The S&P 500 had wiped out 12% in a week. Yet Trump’s advisers insisted the moves were part of a grand vision to remake global trade.
Inside the White House, officials remained defiant. “Wall Street doesn’t understand Main Street,” said a senior official. “And Main Street is still backing the president.”
But behind the scenes, panic was building — and the pivot was already in motion, the WaPo report said.
Step two: The Hannity effect
Late Tuesday night, the real pushback began — on Fox News. During Sean Hannity’s 9pm show, a panel of Republican senators appeared live. Midway through, Senator John Kennedy of Louisiana asked for “15 seconds to speak directly to the president,” knowing Trump would be watching. Lindsey Graham, John Thune, Ted Cruz, and others voiced concern that the tariff chaos could backfire.
Shortly after the broadcast ended, Trump got on the phone with the senators for nearly an hour. They warned him that the strategy was unraveling and urged him to salvage it before global retaliation spiraled out of control.
Ted Cruz gave Trump a stark choice: Use tariffs as negotiating leverage, or risk a retaliatory spiral. “That outcome, I expressed to the president, would be a terrible outcome,” Cruz later said.
Step three: Markets flash red
Trump wasn’t just listening to senators. He was watching markets — and they were sending distress signals. Bond yields were surging. The yuan was plummeting. On Fox News the next morning, JPMorgan CEO Jamie Dimon said a recession was “likely” if the turmoil continued.
“I’m taking a calm view,” Dimon said, “but I think it could get worse if we don’t make some progress here.”
Trump, clearly rattled, posted “BE COOL!” on Truth Social that morning. Minutes later, he posted again: “THIS IS A GREAT TIME TO BUY.”
Step four: Foreign leaders pile on
Throughout Wednesday morning, the phone lines at the White House lit up. Swiss President Karin Keller-Sutter called to protest a 31% tariff on Swiss goods. She reminded Trump that Switzerland had recently dropped its tariffs on US industrial goods. Trump also spoke with EU leaders warning of retaliation tailored to hurt Trump’s voter base — from soybean farmers to plastics manufacturers.
Meanwhile, US commerce secretary Howard Lutnick and treasury secretary Scott Bessent were fielding panicked calls from trade allies. EU trade chief Maros Sefcovic told Lutnick his bloc was readying countermeasures on US steel and aluminum.
Step five: The Oval Office rewrite
By midday Wednesday, Bessent and Lutnick were in the Oval Office with Trump, helping him draft what would become a historic Truth Social post. “We didn’t have access to lawyers,” Trump later said. “We wrote it up from our hearts.”
At 1:18pm, the post went live. The US would pause most of its new reciprocal tariffs — except on China. In one move, Trump calmed global markets and focused all firepower on Beijing.
Bessent called it “one of the most extraordinary Truth posts of his Presidency.” The markets agreed. Stocks surged. Treasury yields normalized. The yuan cratered.
Step six: “One band, one sound”
Peter Navarro, long seen as the most aggressive trade hawk in Trump’s inner circle, was notably absent from the Oval Office meeting. He later gave a Fox Business interview describing the shift as a “beautiful negotiation.”
Asked if he was being sidelined, Navarro dismissed the idea. “We work together beautifully. One band, one sound, my brother.”
But the real action was between Bessent and Lutnick — both seen as more pragmatic — who crafted a pivot that blindsided even White House insiders, the WaPo report said.
Step seven: Enter Xi
With China now the sole target of a new round of tariffs, Beijing responded with fury. It raised duties on US imports to 84%, sanctioned American defense firms, and vowed to “follow through to the end.”
Still, Trump doubled down. “Hopefully in the near future, China will realize that the days of ripping off the U.S.A. … is no longer acceptable,” he posted.
Between the lines
According to a Washington Post report, the abrupt shift — shaped by late-night TV, phone calls from Republican senators, pleas from foreign leaders, and alarming financial data — marked one of the most consequential pivots of Trump’s second term. It also underscored how chaos and instinct, rather than planning or policy, are often the drivers behind Trump’s biggest moves.
But by sparing most US allies from higher tariffs while ratcheting them up on Chinese goods to a record 125%, Trump managed to isolate Beijing economically, setting up a direct confrontation with President Xi Jinping .
Why it matters
- This wasn’t just a trade tweak. It was a dramatic reorientation of US economic warfare — and a message to the world that the Trump administration sees China as the singular antagonist in a new global economic order.
- Wall Street, reeling from a weeklong nosedive, roared back after the announcement.
- Allies, blindsided by Trump’s initial wave of tariffs, welcomed the pause and signaled readiness to talk trade.
- China, now singled out and burdened with a 125% tariff wall, faces heightened economic isolation and limited diplomatic options.
- Treasury secretary Scott Bessent called it a “master stroke” of Trump’s foreign economic policy. “We can probably reach a deal with our allies,” Bessent said. “And then we can approach China as a group”.
Step one: Fire all cannons
The drama began with escalation. On Tuesday, the US enacted sweeping new tariffs — some of the steepest since the Smoot-Hawley Act of the 1930s — on imports from dozens of countries. Wall Street tanked. Bond yields spiked. The S&P 500 had wiped out 12% in a week. Yet Trump’s advisers insisted the moves were part of a grand vision to remake global trade.
Inside the White House, officials remained defiant. “Wall Street doesn’t understand Main Street,” said a senior official. “And Main Street is still backing the president.”
But behind the scenes, panic was building — and the pivot was already in motion, the WaPo report said.
Step two: The Hannity effect
Late Tuesday night, the real pushback began — on Fox News. During Sean Hannity’s 9pm show, a panel of Republican senators appeared live. Midway through, Senator John Kennedy of Louisiana asked for “15 seconds to speak directly to the president,” knowing Trump would be watching. Lindsey Graham, John Thune, Ted Cruz, and others voiced concern that the tariff chaos could backfire.
Shortly after the broadcast ended, Trump got on the phone with the senators for nearly an hour. They warned him that the strategy was unraveling and urged him to salvage it before global retaliation spiraled out of control.
Ted Cruz gave Trump a stark choice: Use tariffs as negotiating leverage, or risk a retaliatory spiral. “That outcome, I expressed to the president, would be a terrible outcome,” Cruz later said.
Step three: Markets flash red
Trump wasn’t just listening to senators. He was watching markets — and they were sending distress signals. Bond yields were surging. The yuan was plummeting. On Fox News the next morning, JPMorgan CEO Jamie Dimon said a recession was “likely” if the turmoil continued.
“I’m taking a calm view,” Dimon said, “but I think it could get worse if we don’t make some progress here.”
Trump, clearly rattled, posted “BE COOL!” on Truth Social that morning. Minutes later, he posted again: “THIS IS A GREAT TIME TO BUY.”
Step four: Foreign leaders pile on
Throughout Wednesday morning, the phone lines at the White House lit up. Swiss President Karin Keller-Sutter called to protest a 31% tariff on Swiss goods. She reminded Trump that Switzerland had recently dropped its tariffs on US industrial goods. Trump also spoke with EU leaders warning of retaliation tailored to hurt Trump’s voter base — from soybean farmers to plastics manufacturers.
Meanwhile, US commerce secretary Howard Lutnick and treasury secretary Scott Bessent were fielding panicked calls from trade allies. EU trade chief Maros Sefcovic told Lutnick his bloc was readying countermeasures on US steel and aluminum.
Step five: The Oval Office rewrite
By midday Wednesday, Bessent and Lutnick were in the Oval Office with Trump, helping him draft what would become a historic Truth Social post. “We didn’t have access to lawyers,” Trump later said. “We wrote it up from our hearts.”
At 1:18pm, the post went live. The US would pause most of its new reciprocal tariffs — except on China. In one move, Trump calmed global markets and focused all firepower on Beijing.
Bessent called it “one of the most extraordinary Truth posts of his Presidency.” The markets agreed. Stocks surged. Treasury yields normalized. The yuan cratered.
Step six: “One band, one sound”
Peter Navarro, long seen as the most aggressive trade hawk in Trump’s inner circle, was notably absent from the Oval Office meeting. He later gave a Fox Business interview describing the shift as a “beautiful negotiation.”
Asked if he was being sidelined, Navarro dismissed the idea. “We work together beautifully. One band, one sound, my brother.”
But the real action was between Bessent and Lutnick — both seen as more pragmatic — who crafted a pivot that blindsided even White House insiders, the WaPo report said.
Step seven: Enter Xi
With China now the sole target of a new round of tariffs, Beijing responded with fury. It raised duties on US imports to 84%, sanctioned American defense firms, and vowed to “follow through to the end.”
Still, Trump doubled down. “Hopefully in the near future, China will realize that the days of ripping off the U.S.A. … is no longer acceptable,” he posted.
Between the lines
- Trump’s strategy now hinges on using US allies as leverage against Beijing — a reversal from his previous go-it-alone approach. By pausing punitive tariffs on Europe, Japan, India and others, he’s creating a trade bloc by default.
- The US-China showdown is now the centerpiece of Trump’s second-term foreign policy. But analysts warn: This cornering of China could easily spiral.
- Beijing responded by raising tariffs to 84% on US imports and blacklisting American defense firms.
- China’s yuan sank to its lowest level since 2007.
- Goldman Sachs slashed China’s 2025 growth forecast from 4.5% to 4% due to trade headwinds.
- “The prospects for negotiated dealmaking were kind of evaporating before Wednesday,” said Susan Shirk, director emeritus of the 21st Century China Center. “Now I think they are just going to hunker down and make the best of it”.
- Trump’s trade team is now racing to lock in deals with countries like Vietnam, Japan, and South Korea, with Bessent saying negotiations are imminent.
- Meanwhile, China is recalibrating. Premier Li Qiang told European Commission President Ursula von der Leyen this week that “protectionism leads nowhere.” But Chinese leaders also know the optics: Xi can’t appear to cave to Trump.
- The commerce ministry in Beijing promised to “follow through to the end” if the US continues its “economic coercion.”
- Beijing is considering further export controls on rare earths and encouraging Chinese manufacturers to resist shifting supply chains abroad.
- Internally, China is eyeing stimulus to offset the damage.
- “We don’t back down,” Chinese foreign ministry spokesperson Mao Ning posted on X, sharing a defiant clip from Mao Zedong.
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