Kate Linebaugh and Molly Ball go behind the scenes of the administration’s tariff pause. We dive deep with WSJ’s Josh Dawsey, exploring the tension in the days after the announcement and what really changed the president’s mind. Plus, your questions! Further Listening: - China Unleashes a Trade War Arsenal - The Tariff Trade Off: Jobs vs. Higher Prices - Wall Street Speaks Out Against Tariffs Sign up for WSJ’s free What’s News newsletter . Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What triggered the tariff pause in the Trump administration?
Hi, Molly. Hey, Kate. I know you're not surprised to see me here, but I'm here for Ryan.
Yeah, I was hoping you'd do like a Ryan impression, you know, like maybe you can like talk about basketball and I could be confused. And the Ducks. Yes, definitely some Oregon references. Got to get that in here.
But we're not going to do that. Anyway, great to have you. How are you doing? I'm doing just fine. I'm a little bit exhausted from the tariff roller coaster of the last week. It's been a lot. Indeed. Since so-called Liberation Day, when Trump announced sweeping tariffs, the markets tanked. And then on Wednesday, Trump put in place a 90-day pause. And the stock market shot up. That's right.
So, Molly, what does this mean for Trump? Politically, how is it playing out?
Not great. We've now had several polls come out since Liberation Day. All of these polls are showing that his approval rating on the economy specifically has tanked. It's underwater. The tariffs are not popular by big double digit margins, 20, 30 points with all kinds of voters. So, yeah, it's not going great. And is that why the pause button was hit? Well, we're going to talk about that.
It seems to have had less to do with the politics than with the markets. That seems to have been what finally scared him straight.
From The Journal, this is Trump 2.0. I'm Kate Linebaugh. And I'm Molly Ball. It's Friday, April 11th. Coming up, we'll break down the weakened tariffs and go behind the scenes at the White House. So, Molly, last week, Trump announced these sweeping tariffs and seemed to be sticking to his guns until Wednesday, when in a post on Truth Social, he announces this pause. Were you surprised?
I mean, you know me. I try never to be surprised by anything Trump does. He had repeatedly said that he, like you said, was going to ride this out, was going to stick to his guns, didn't mind the pain, didn't care what was happening in the economy and the markets. But we were hearing this rising tide of angst from people around him and people in the Republican Party.
So it wasn't too surprising that he did decide to change course. But if there's anything that's predictable about Trump, it's unpredictability.
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Chapter 2: How did the markets react to Trump's tariff announcements?
So, you know, there were some in, like, the sort of new right think tank world who were saying, yes, he's finally doing it. This is the promise that we believe he was elected on. And, you know, this is a very influential faction in today's White House, not only in the sort of Peter Navarros of the world. But J.D.
Vance is really one of the intellectual architects of this movement that wants to move the Republican Party in what they see as a pro-worker direction. And they're true believers in this philosophy Trump has been espousing about sort of gutting it out in the name of long-term reindustrialization.
So some people were absolutely thrilled to see that Trump was not cowed by the markets, and they were relatively dismayed to see him then cave.
What role did his team play in changing his mind?
Well, I mean, a lot of the particulars we're still trying to figure out. But on Wednesday, he had a meeting with Scott Pesant, his treasury secretary, and Howard Lutnick. And in that meeting is when he dashed off that Truth Social post at 1.18 p.m. that sort of sent the market surging up.
I think he had talked to lots of his trade advisors on Monday and Tuesday, you know, throughout the day about what he should do. I think the way it was described to me by multiple people is that Treasury Secretary Scott Pesent has been the key player here in getting him to this outcome.
And the face-saving solution is that this 90-day pause grants him time to negotiate.
Yeah. And I think what the argument was is that in this 90 days, you'll have lots of countries that come to the table and want to make deals with us. And it won't just be viewed as a capitulation at the end of 90 days. You'll have a lot to show for it. We'll see if the White House is able to actually pull that off or not.
But we're hearing pretty reliably that lots of different countries really are coming to the table and have been in the most recent days because they don't want extraordinary tariffs from the United States on their products.
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Chapter 3: What were the political implications of the tariff pause?
Hello, my name is Richard and my question is this. Instead of imposing tariffs on every country in the world and affecting the American economy in a detrimental manner, why didn't the Trump administration just go out and negotiate or renegotiate with all of those countries for more favorable domestic manufacturing and importing and exporting of goods?
whereby they look like they're getting a win-win situation instead of expecting every country on earth to come to us.
Well, they could have done that. And I think that's a fair question. I think what Trump would say is you are better having negotiations when you have leverage, right? If you go out and say, we're going to make deals and people aren't feeling any pain or any punishment, they might be less likely to come to the table. I think you could have had a lot less of an impact on the economy.
Certainly the way they did it had a deleterious impact on markets. really sort of threw the world into chaos. And I think there are a lot of questions on whether that is worth it. But I think in Trump's mind, he says, you know, I showed you I was playing hardball here, at least for a week, and I might do this again if you don't give me a deal and you need to come to the table, right?
So, you know, I think it's certainly a fair question to say you could have just gone out and made deals with these countries one-on-one. Would the countries have been as eager to come to the table Without this, I don't know the answer to that.
In his 90-day pause, he paused these so-called reciprocal tariffs on all countries but one. He still kept the tariffs on China and turned up the heat. What does that say?
Well, I think he wants to put China in an uncomfortable spot. He wants to build a wall kind of around them, so to speak, right? I also think in that move, you know, it gave him a way to not just say that he was pausing the tariffs and saying that he was taking a more aggressive stance towards one of these countries, right?
And I think it was to send a message to the rest of the world that, you know, if you come and give me a deal, you're not going to have to be like China, right? He wants to alienate them, to put them on an island. I think that's part of his strategy.
Yeah, I mean, look, the trade war with China is well underway. And with the caveat that Trump is nothing if not unpredictable and could reverse himself in any way at any moment, the reality is this is now a major trade war. much bigger than anything Trump did against China in his first term. And we are still at the very beginning of these tariffs actually being implemented.
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