How bond market catastrophe forced Trump to pause tariffs

An impending bond market catastrophe was the reason why US President Donald Trump paused his reciprocal tariffs on nearly all the affected countries. This is according to a report that was published by the CNN.

According to the report, earlier on Wednesday, alarm bells went off at the government’s Treasury Department following a sharp sell-off in the US government bond markets. The bond markets are usually considered a safe haven.

However, the CNN reports, the sell-off raised fears that the economic impact of the tariffs was more catastrophic than Trump and his advisers may have anticipated.

“The growing alarm inside the Treasury Department over developments in the bond market was a central factor in Trump’s decision to hit pause on his reciprocal tariff regime,” the CNN reported.

“Treasury Secretary Scott Bessent raised those concerns directly to Trump Wednesday in a meeting that preceded the pause announcement, underscoring concerns shared by White House economic officials who had briefed Trump on the accelerating selloff in the US Treasury market earlier in the day.”

The CNN further reported that the “sharp selling of Treasurys – coupled with low demand for a sale of new US Treasury debt – sparked further concerns that foreign countries were abstaining from buying new US Treasurys and selling the debt they had.”

United States revokes all visas held by South Sudanese passport holders

However, Trump doubled down on China which has been the only nation to stand up against the US by instituting its own counter tariffs. He placed a 125 percent tariff on Chinese goods – up from 104 percent. This was followed by an announcement by Beijing that it was raising its tariffs on imported US goods to 84 percent.

Besides China, the other countries had been hit with tariffs ranging from 11 percent to a whopping 50 percent. The EU was hit with a 20 percent reciprocal tariff, Japan at 24 percent, Vietnam 46 percent and South Korea at 25 percent.

These Trump tariffs were allegedly calculated by dividing a country’s trade deficit with the United States by its exports to the country and then multiplying by 1/2.