How Trump changed his mind on tariffs

Published

4 weeks ago

April 10, 2025

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“Liberation Day” just gave way to Capitulation Day.

US President Donald Trump pulled back on Wednesday on a series of harsh tariffs targeting friends and foes alike in an audacious bid to remake the global economic order.

Mr Trump’s early afternoon announcement followed a harrowing week in which Republican lawmakers and confidants privately warned him that the tariffs could wreck the economy.

His own aides had quietly raised alarms about the financial markets before he suspended a tariff regime that he had unveiled with a flourish just one week earlier in a Rose Garden ceremony.

Tariffs latest: Beijing takes fight to Trump

The stock market rose immediately after the about-face, ending days of losses that have forced older Americans who’ve been sinking their savings into 401(k)s to rethink their retirement plans.

Ahead of Mr Trump’s announcement, some of his advisers had been in a near panic about the bond markets, a senior administration official told Sky News’ US partner network NBC News.

Interest rates on 10-year Treasury bonds had been rising, contrary to what normally happens when stock prices fall and investors seek safety in treasuries.

The unusual dynamic meant that at the same time the tariffs could push up prices, people would be paying more to buy homes or pay off credit card debt because of higher interest rates. Businesses looking to expand would pay more for new loans.

Two of Mr Trump’s most senior advisers, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, presented a united front on Wednesday, urging him to suspend the tariffs in light of the bond market, the administration official said.

In a social media post, Mr Trump announced a 90-day pause that he said he’ll use to negotiate deals with dozens of countries that have expressed openness to revising trade terms that he contends exploit American businesses and workers.

One exception is China. Mr Trump upped the tariff on the country’s biggest geopolitical rival to 125%, part of a tit-for-tat escalation in an evolving trade war.

Mr Trump reversed course one week after he appeared in the Rose Garden and unveiled his plan to bring jobs back to the United States. Displaying a chart showing the new, elevated tariffs that countries would face, Mr Trump proclaimed: “My fellow Americans, this is Liberation Day.”

It proved short-lived. Markets plunged in anticipation of heightened trade wars, wiping out trillions of dollars in wealth.

Democrats seized on the issue, looking to undercut a source of Mr Trump’s popular appeal: the view that he can be trusted to steer the nation’s economy.

“Donald Trump’s market crash has vaporised a whopping $104,000 from the average retirement account,” Senate Minority Leader Chuck Schumer, said on Wednesday on the Senate floor, hours before the president’s reversal.

The episode laid bare the rifts within Mr Trump’s team of senior advisers as the White House struggled to offer a clear, consistent argument about the duration of the tariffs.

While Mr Bessent seemed open to negotiations, Peter Navarro, a senior trade adviser, appeared to take a more hard-line posture.

Elon Musk, the billionaire Tesla chief executive who has been advising Mr Trump on the government workforce, called Navarro “dumber than a sack of bricks,” while Mr Navarro described Mr Musk as someone who is merely “a car assembler, in many cases”.

But the weeklong drama also underscored the peril of a policymaking process that is often tied to the wishes and vagaries of one man: Donald Trump.

Asked about the dust-up between Mr Musk and Mr Navarro, Republican Senator Lindsey Graham, a golf partner of Mr Trump’s, said: “I don’t think it matters. The only one who matters is Trump.”

Markets tend to favour predictability, as do business leaders deciding where to build new plants. When Mr Trump sets a course, however, there are bound to be detours.

A friend of his who spoke to him in recent days said Mr Trump gave no sign he was about to “back down quickly on this stuff”.

Mr Trump believes other countries trade unfairly and sees tariffs as a tool to make the United States more competitive, the person said.

“He’s very confident it’s going to work for him,” the person added, speaking on condition of anonymity.

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And yet in the run-up to Wednesday’s announcement, Mr Trump and his aides were also hearing from GOP lawmakers and outside allies urging an alternative path.

One was Larry Kudlow, who hosts a show on Fox Business Network and was a senior economic adviser in Mr Trump’s first term.

Mr Kudlow told NBC News that he has had “ongoing” talks with friends in the West Wing about the need to negotiate with other countries before the United States slaps them with tariffs that stand in perpetuity.

Describing Mr Trump’s move Wednesday as “fabulous,” Mr Kudlow added: “Dealmaking is the best thing to do. In the last 48 hours, Trump has gone from non-negotiating to negotiating.

“It’s very clear that Bessent is now the point man on trade. Very clear.”

Anxious GOP lawmakers also weighed in.

Mr Graham said he spoke to Mr Trump at length on Tuesday night and told him he had been hearing from car manufacturers who are worried about how the tariffs would affect their business. BMW operates a plant in Mr Graham’s home state and is one of the companies he said he had spoken to.

Senator John Kennedy, a Republican lawmaker who was also in touch with the administration, said on Tuesday that he planned to have lunch with Mr Bessent. On Wednesday, he told NBC News he was also talking to the White House.

Mr Kennedy likened Mr Trump to the “pit bull who caught the car”. Now, he said, the question becomes: “What are you going to do with the car?”

After more market losses this week, and with pressure mounting from Republicans on Capitol Hill, Mr Trump began having second thoughts.

In his first term, he often viewed the ups and downs of the stock market as a kind of report card on his presidency, celebrating its rise. The downturn had got his attention.

“People were getting a little queasy,” he acknowledged Wednesday on an event with NASCAR racing champions.

“Over the last few days” he began to more seriously consider pausing the additional tariffs, he told reporters later in the day in an Oval Office appearance.

One prospect that intrigued him was personally negotiating new trade deals with the countries looking to get out from under the tariffs, the senior administration official said.

He’d made up his mind. Sitting with Mr Bessent and Mr Lutnick, he crafted the note announcing the 90-day postponement and ending, for the time being, the biggest economic crisis of his young presidency.

“We wrote it from our hearts, right?” Mr Trump said. “It was written as something that I think was very positive for the world and for us, and we don’t want to hurt countries that don’t need to be hurt, and they all want to negotiate.”

The day closed with the Dow Jones Industrial Average up nearly 8%, erasing some – but not all – of the “post-Liberation Day” losses.

Messy as it all may have seemed, his administration insisted that all is unfolding as planned.

“You have been watching the greatest economic master strategy from an American president in history,” White House deputy chief of staff Stephen Miller posted on Wednesday afternoon.

World

Cardinal Robert Francis Prevost becomes first American pope – and will take name of Leo XIV

Published

10 hours ago

May 8, 2025

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Cardinal Robert Francis Prevost becomes first American pope - and will take name of Leo XIV

US Cardinal Robert Francis Prevost has been chosen as the new pope.

Senior cardinal Dominique Mamberti came out onto St Peter’s balcony to announce the new pope to cheering crowds as thousands of people gathered in the square below, saying the famous Latin words: “Habemus Papam”, meaning “we have a pope”.

The 69-year-old will take the name Leo XIV – and greeted thousands of faithful from the balcony of St. Peter’s Basilica as the new head of the Catholic Church.

Speaking in Italian, the pontiff says Pope Francis was always “courageous and blessed Rome”.

“The pope that blessed Rome gave his blessing to the whole world on that Easter morning,” he says.

“Together we must try to find out how to be a church that builds bridges, establishes dialogue and is open to receives everybody.

“Let us follow up that blessing. God loves us and God loves all of you.

“Sin will not prevail, we are all in the hands of God.”

The pope went on to speak in Spanish, nodding to his time as a missionary, and said: “I would particularly like to say hello to my compatriots from Peru.

“It was a great pleasure for me to work in Peru.”

The new pontiff was chosen on the second day of the conclave after white smoke emerged from the Sistine Chapel at just after 5pm (UK time) on Thursday.

Follow our live coverage here

Some 133 cardinals gathered in Rome before being led into the Sistine Chapel on 7 May to start the conclave – the secretive process to decide the new pontiff.

They handed over their phones before entering the building, which had been swept for hidden cameras, recording equipment, and bugs.

The windows were also covered to keep the outside world out and to stop drones from spying.

Each cardinal swore an oath of secrecy. They did not emerge from the Vatican until the new pope was chosen.

To be elected, the new pontiff had to win a two-thirds majority (89 votes). Afterwards, he was asked whether he accepted the papacy and by which name he wished to be known.

When the pope was chosen, the ballots were burned in a stove with an additive to produce white smoke that billowed from a chimney to alert onlookers that the decision had been made.

Previously, the ballots were burned with an additive to produce black smoke, indicating that the pope had not yet been chosen.

The election comes after Pope Francis died on 21 April at the age of 88 from a stroke and heart failure.

More than 250,000 people gathered at the Vatican for his funeral on 27 April.

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World

Who is Pope Leo XIV? American Robert Prevost announced as leader of Catholic Church

Published

12 hours ago

May 8, 2025

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Who is Pope Leo XIV? American Robert Prevost announced as leader of Catholic Church

The Vatican has announced the first ever American leader of the Catholic Church – Robert Prevost, who will be known as Pope Leo XIV.

The 69-year-old cardinal was born in Chicago and spent many years as a missionary in Peru.

Follow live updates: New pope elected

He was made a cardinal by Pope Francis in 2023 and appointed head of the dicastery for bishops, a powerful position responsible for selecting new bishops.

As cardinal, he said little on key issues of the church, but some of his positions are known.

He is reportedly very close to Francis’s vision regarding the environment, outreach to the poor and migrants. He said in 2024 “the bishop is not supposed to be a little prince sitting in his kingdom”.

He also supported Pope Francis’s stance on allowing divorced and remarried Catholics to receive Holy Communion. However, he only showed mild support for Francis allowing priests to bless same-sex couples.

Pope Leo has years of experience in leadership roles within the church.

He was twice elected to the top position of the Augustinian religious order and Francis clearly had an eye on his progress – moving him from the Augustinian leadership back to Peru in 2014, where he served as administrator and later archbishop of Chiclayo.

He acquired Peruvian citizenship in 2015 and remained in that role until 2023, when Francis brought him to Rome.

While there has long been a taboo against an American pope – given the geopolitical power the US already wields – Leo was being promoted as a “compromise candidate” ahead of the conclave. The amount of time he has spent in Peru also allows him to be seen as a more universal candidate rather than American.

The world learned a new pope had been chosen at around 6.08pm local time (5.08pm UK time) on Thursday as white smoke suddenly emerged from the chimney of the Sistine Chapel.

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First US pope chosen

The 133 cardinals sequestered in the chapel picked the new leader of the Catholic Church on the second day of the conclave.

As the smoke appeared, cheers went up in St Peter’s Square, where thousands of people had gathered in the hope of witnessing history.

Just over an hour later, the Pope was introduced on the central balcony of St Peter’s Basilica as a crowd of an estimated 50,000 people looked on.

World

How India and Pakistan’s militaries match up

Published

16 hours ago

May 8, 2025

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How India and Pakistan's militaries match up

India’s airstrikes on Pakistani-controlled Kashmir after last month’s deadly militant attack on the Indian-administered side of the disputed region have raised fears of a dangerous escalation in the conflict.

It is not yet known what specific weapons were used in Wednesday’s early morning strikes which Delhi said targeted “terrorist camps”, though Islamabad said civilian infrastructure, including mosques, was hit.

However, India is reported to have deployed Rafale jets equipped with SCALP air-to-ground cruise missiles.

The nuclear-armed neighbours have been boosting their military capabilities since they clashed in a series of border skirmishes in 2019.

As of 2024, India has 36 Rafale jets, eight two-seat variants and 28 single-seat variants, according to the International Institute for Strategic Studies (IISS).

The aircraft were acquired under a 2016 inter-governmental agreement between India and France, which included a weapons package. This package featured MICA and SCALP missiles.

Between 2020 and 2024, around a third of India’s arms imports came from France, said the Stockholm International Peace Research Institute (SIPRI).

Pakistan claimed to have shot down five Indian aircraft, including three Rafale jets, on Wednesday following the Indian attack.

If this was the case, the Pakistani military would have used surface-to-air missiles (SAMs). According to IISS, Pakistan has more than 200 SAMs. Although, for context, India has well over 800 across their armed forces.

How do India and Pakistan rank?

India’s overall military capability significantly exceeds that of Pakistan.

It ranks fourth in the world compared to Pakistan’s 12th place, according to Global Firepower’s index, which considers a range of factors to assess military strength.

In terms of personnel, India has 1,237,000 active personnel in its army, 75,000 in the navy and 149,900 air force.

Pakistan has fewer than half that with 560,000 active personnel in the army, 30,000 in the navy and 70,000 in the air force.

India’s armed forces twice the size of Pakistan’s

Sky’s security and defence analyst Professor Michael Clarke said: “The Indian forces are about double the size of Pakistan’s forces… if it came to a war, India will win.”

He added: “If it’s below the level of a war, if it’s some sort of military confrontation, then Pakistan might think it could get something out of it.”

The two forces have similar nuclear capabilities. India has an estimated 180 nuclear warheads, while Pakistan has around 170, according to US thinktank the Federation of American Scientists.

However, experts agree that it is unlikely that either side will use their nuclear powers at this stage.

Professor Clarke said: “Nuclear weapons would only be used by any country if its existence is at stake. Nothing that happens in Kashmir threatens the existence of Pakistan or India.”

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.