‘Crash the Economy’: The 1 Reason Donald Trump Lost His Tariff War

On Wednesday, a week after declaring “Liberation Day” and announcing tariffs for most of the countries in the world, President Trump suddenly reversed course, declaring that while the announced tariffs on China would be increased, he was initiating a 90-day pause on the “reciprocal” tariffs on most other countries, while keeping across-the-board 10-percent tariffs in place.

Trump’s team claimed, to the belief of very few, that abruptly reversing course was the plan all along, even though Trump had declared days earlier that “MY POLICIES WILL NEVER CHANGE,” and had followed that up days later with a plea to “BE COOL.”

Trump’s most staunch supporters, like Stephen Miller, went from arguing that the original tariffs were brilliant, before pivoting to declaring the exact opposite policy as equally brilliant.

After a week of a collapsing stock market, the announcement of the reversal led to the best week on Wall Street in over a decade.

What really caused the reversal? And what about that weird Trump post a few hours earlier, in which he declared it was a good time to buy stocks?

Could Trump Crash the Economy? The Power of the Bonds

According to multiple published reports, Trump’s flip-flop on tariffs was mostly about the bond market. In fact, many experts are pointing to that being the one reason he had to change course.

Per CNN, it was “a sharp sell-off in US government bond markets,” and resulting fears inside the Treasury Department that Treasury Secretary Scott Bessent shared with the president, that drove Trump to change course.

“Key business community allies” also reached out to Trump,” the CNN report said.

Trump seemed to admit this to reporters Thursday.

“The bond market is very tricky, I was watching it,” Trump told the media. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”

A New York Times tick-tock of the day on Wednesday told a similar story. It was “a rapid rise in government bond yields” that caused Trump to “blink,” per the Times. The report added that both Bessent and Vice President J.D. Vance were among those advocating “a more structured approach,” one that would isolate China rather than take on the whole world at once.

Trump, in talking to reporters, referred to this as people “getting yippy.”

Many economists were making the argument that Trump was going to cause massive damage to the U.S. economy and had no choice but to back off, or risk a recession or maybe something even worse.

Insider Trading?

Much has been said about Trump’s Truth Social post, on Wednesday morning, in which he declared, “THIS IS A GREAT TIME TO BUY!!!” This was followed by “DJT,” Trump’s initials. With most politicians, this means that the politician, rather than a staffer, is the author of the post, but in Trump’s case, all Truth Social posts are presumed to be his own.

But “DJT” is also the stock ticker symbol for Trump’s media company, which led some to speculate he was telling people to buy that company’s stock.

Others, including elected officials, speculated that the post was part of an insider trading scheme since Trump was telling people to buy stock, hours before he made a decision that he had to have known would cause stock prices to rise. This happened two days earlier when a bogus report that Trump was considering that exact policy — a 90-day pause — temporarily sent the stock market storing.

“An insider trading scandal is brewing,” Sen. Chris Murphy (D-CT) posted on Thursday, referencing the morning post, further speculating that the president appeared “eager for his people to make money off the private info only he knew.”

Rep. Alexandria Ocasio-Cortez also posted Wednesday that “any member of Congress who purchased stocks in the last 48 hours should probably disclose that now,” while sharing another post that Nasdaq call volume spiked shortly before the tariff reversal announcement.

This case remains very circumstantial, and cases of insider trading, or other inappropriate use of inside information by members of Congress, are notoriously hard to prove. But this line of inquiry bears watching.

About the Author: Stephen Silver

Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.