The gyrations in financial markets this month tell us a lot about the nature of the Trump administration: it is flying by the seat of its pants.

The April 2 “Liberation Day”, with Donald Trump’s theatrical announcement of a 10 per cent universal baseline tariff and punitive reciprocal tariffs on about 90 countries, now seems an aeon ago given the continuing stream of amendments that have already occurred and others now being flagged.

On Tuesday, Treasury Secretary Scott Bessent told a closed-door meeting with investors that the 145 per cent tariff on imports from China, and China’s 125 per cent retaliatory tariffs, couldn’t be sustained, and the countries would have to find a way to de-escalate, which he said could occur in the “very near future”.

Trump’s “Liberation Day” now seems like an aeon ago.Credit: Getty Images

Trump, asked about those comments, said he was willing to “substantially” pare back the tariffs on China, adding he would be “very nice” to China and not play “hardball”. He also said he would announce the actual tariffs on China and other countries “over the next two to three weeks”, a timeline he said was dependent on China’s willingness to engage.

Only a week ago, Trump was bashing the Federal Reserve Board’s chair, Jerome Powell, for saying the tariffs would have a material impact on inflation and for indicating the Fed would keep interest rates on hold until it saw their effects.

He said Powell’s “termination” couldn’t come fast enough, and his economic adviser, Kevin Hassett, said the White House was continuing to study whether the Fed chief could be fired.

Then, on Tuesday, Trump said he had no intention of firing Powell.

Trump’s U-turns on tariffs and Powell demonstrate that financial markets can, to some extent, protect the US and its........

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