Trump tariffs live: US president announces 90-day pause for most countries but hits China with 125% levy

Donald Trump said the bond market had recovered well after investors became queasy about it in reaction to his tariffs.

Earlier on Wednesday, analysts had warned that the US Federal Reserve could be forced to intervene to stabilise the bond market after a sharp rise in US Treasury yields overnight, signalling that US assets were temporarily losing their safe-haven status.

US 10-year Treasury yields hit a seven-week high of nearly 4.5 per cent – but have now fallen back to 4.34.

“The bond market now is beautiful,” Mr Trump told reporters, speaking after a $39-bn auction also eased concerns by coming in within market expectations, priced at a high yield of 4.435 per cent, lower than the rate forecast at the bid deadline – suggesting solid investor demand.

Government sources said Mr Trumps decision showed “cool and calm can pay off”.

One said: “It’s how the PM does business and it’s the right approach. He has been urging it in all his calls this week and will continue to.”

Downing Street said the government would continue to talk to the US administration.

A No10 spokesperson said: “A trade war is in nobody’s interests. We don’t want any tariffs at all, so for jobs and livelihoods across the UK, we will coolly and calmly continue to negotiate in Britain’s interests.”

Sir Keir Starmer has warned that striking an economic deal with the US or securing lowered American tariff rates for the UK would not be “enough” for Britain.

Before Donald Trump suspended or reduced most of his tariffs, the Prime Minister conceded he was unsure whether the 10% import tax imposed on British goods would be in place indefinitely and said the Government must “step up” to adapt to a rapidly changing world.

Friedrich Merz, Germany’s likely next chancellor, said US President Donald Trump’s pause of tariffs for 90 days was evidence of a united European approach to trade having a positive effect, and called for tariff-free US-EU trade.

“Europeans are determined to defend ourselves and this example shows that unity helps most of all,” he told TV show RTL Direkt.

“Let’s all set tariffs of 0% on transatlantic trade, and then the problem will be solved,” he added.

US stock markets have soared to near-record gains after Donald Trump announced a pause on most of his sweeping global tariffs.

You can refresh our breaking report below for more details, and we’ll be bringing you more live updates here on the blog:

Responding to news that Donald Trump has paused higher tariffs against most countries for 90 days, Liberal Democrat Leader Ed Davey said: “This is Donald Trump’s Liz Truss moment.

“He’s been forced into an embarrassing climbdown. Now we need to get him to go further and get rid of his remaining reckless tariffs. That means an economic coalition of the willing and uniting with our allies.”

US Treasury secretary Scott Bessent has claimed that the markets “didn’t understand” Donald Trump’s tariff strategy.

“The market didn’t understand, those were maximum levels. The countries can think about those levels as they come to us to bring down their tariffs, their non-trade barriers,” he told reporters at the White House.

He said Mr Trump “created maximum negotiating leverage for himself” and the Chinese have “shown themselves to the world as the bad actors”.

Asked whether the 90-day pause on “reciprocal tariffs” was due to the chaos in financial markets, US Treasury secretary Scott Bessent told reporters outside the White House: “No. It’s because of a large number of inbounds – we’ve had more than 75 countries contact us and I imagine, after today, there will be more.

“So it is just a processing problem. Each one of these solutions is going to be bespoke, it is going to take some time, and President Trump wants to be personally involved – so that’s why we’re giving the 90-day pause.”