Another U-Turn: Trump reverses tariffs that caused market meltdown, but companies remain bewildered

WASHINGTON (AP) — President Donald Trump delivered another jarring reversal in American trade policy Wednesday, suspending for 90 days import taxes he’d imposed barely 13 hours earlier on dozens of countries while escalating his trade war with China. The moves triggered a powerful stock market rally on Wall Street but left businesses, investors and America’s trading partners bewildered about what the president is attempting to achieve.

The U-turn came after the sweeping global tariffs Trump announced last week set off a four-day rout in global financial markets, paralyzed businesses and raised fears the U.S. and world economies would tumble into recession.

White House press secretary Karoline Leavitt tried to characterize the sudden change in policy as part of a grand negotiating strategy. But to those outside the Trump administration, it looked like a cave-in to market pressure and to growing fears that the president’s impetuous use of import taxes — tariffs — would cause massive collateral economic damage.

“Other countries will welcome the 90-day stay of execution — if it lasts — but the whiplash from constant zig-zags creates more of the uncertainty that businesses and governments hate,” said Daniel Russel, vice president at the Asia Society Policy Institute. “The Administration’s blunt-force tactics have rattled allies, who see the sudden reversal as damage control following the market meltdown, rather than a pivot to respectful, balanced negotiations.’’

Trump’s turnaround Wednesday capped a wild week in U.S. trade policy. On Wednesday April 2 — which Trump labeled “Liberation Day’’ — the president announced plans to impose tariffs on almost every country on earth, upending the world trading system. The first of his new tariffs — a 10% “baseline’’ tax on imports from most countries — went into effect Saturday.

At midnight Wednesday, he upped the ante by slapping what he called “reciprocal’’ taxes on countries he accused of unfair trading practices and adding to U.S. trade deficits. Those are the tariffs he suspended for 90 days, saying the pause would give countries time to negotiate with him and his trade team.

There was one exception to the reprieve: He raised the tariff on Chinese imports to a staggering 125%, punishing Beijing for announcing retaliatory tariffs on the United States. That number was adjusted even higher on Thursday — to 145% — after the White House accounted for Trump's previous 20% fentanyl tariffs. Meanwhile, the 10% baseline tariffs on most countries – a substantial act of protectionism in their own right – remain in place.

Trump’s ever-changing trade war tactics — which include earlier levies on cars, steel and aluminum, and Mexico and Canada — have already done damage, forcing dazed companies to delay or cancel plans as they tried to figure out what Trump was doing and how they should respond.

Some companies temporarily laid off workers after Trump’s widespread tariffs were announced, while there were signs that many firms held off on hiring amid the widespread uncertainty the tariffs created.

Carmaker Stellantis temporarily cut 900 jobs at factories in Michigan and Indiana after production was halted at two plants in Canada and Mexico in the wake of Trump's 25% duties on imported cars.

And Cleveland-Cliffs laid off 1,200 workers at a factory in Michigan and an iron ore mine in Minnesota in response to a drop in demand from auto companies. Cleveland-Cliffs said it would resume production at the two facilities once auto production returned to the U.S.

Minutes from the Federal Reserve’s March 18-19 meeting, released Wednesday, showed that many of its policymakers said that their business contacts “reported pausing hiring decisions because of elevated policy uncertainty."

And Delta Air Lines said earlier Wednesday that demand for domestic leisure trips and corporate travel has stalled because of the uncertainty around global trade. In a conference call with investors, the company said it was cutting capacity. It also declined to provide a full-year financial forecast.

“Right now, it’s hard to know how this is going to play out, given that this is somewhat self-imposed,” Delta CEO Ed Bastian said. “I’m hopeful that sanity will prevail and we’ll move through this period of time on the global trade front relatively quickly.”

Businesses have sought greater clarity around Trump's ultimate tariff policies for weeks. It's not clear that the 90-day pause has reduced their uncertainty.

Jeff Jaisli, CEO of the New Jersey-based importer/exporter Jagro, said Trump’s Truth Social post on Wednesday had made things “even worse’’ and more confusing. He was trying to figure out which tariffs applied to which countries.

“We’re scrambling to find correct information and procedures for entries we’re processing NOW in real time,’’ he said by email. He could find no guidance on the websites of the White House or the Customs and Border Protection agency, which collects tariffs. Earlier, Jaisli called Trump's tariffs "a grenade that was thrown into the room that’s going to cause chaos.''

Trump's tariffs have set off a tit-for-tat trade war with China, the world's second-biggest economy. Even before Trump upped his taxes on China to 145%, the Chinese had set their own tariffs on the United States at 84%.

The World Trade Organization's director-general, Ngozi Okonjo-Iweala, warned that the rising tension could reduce U.S.-China merchandise trade by 80% and "severely damage the global economic outlook.”

“Of particular concern is the potential fragmentation of global trade along geopolitical lines,” she wrote in a statement late Wednesday. “A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly 7%.”

Citing WTO projections, she warned the negative effects could ripple through to other economies, especially developing ones. She urged countries to ensure an open global trading system and resolve differences through cooperation.

Meanwhile, U.S. companies struggled to figure out how to respond to huge levies on Chinese products they'd come to rely on.

Jessica Bettencourt is CEO of Klem’s, a third-generation store in Spencer, Massachusetts that sells everything from lawn and garden items to workwear and gifts. She said that the escalation of tariffs from China have made her stop ordering any new fourth-quarter product that is holiday, gifts or toys. She is also reconsidering any fall apparel and footwear orders that aren’t already placed.

“The worst thing is uncertainty and we have massive uncertainty,” said Jason Goldberg, chief commerce strategy officer at Publicis Groupe, a global marketing and communications company. “No one can make any moves. Everybody is trying to save as much cash and defer any unnecessary expense. People are getting laid off. Orders are getting cancelled. Expansion plans are being put on hold.”

Robert Bumsted and Anne D'Innocenzio in New York, Dee-Ann Durbin in Detroit and Jamey Keaten in Geneva contributed to this story.

People walk past the New York Stock Exchange, Monday, April 7, 2025, in New York. (AP Photo/Yuki Iwamura)

James Lamb works on the floor at the New York Stock Exchange in New York, Monday, April 7, 2025. (AP Photo/Seth Wenig)

The YM Uniform container ship is docked at the Port of Los Angeles Wednesday, April 9, 2025, in Los Angeles. (AP Photo/Damian Dovarganes)

Truck await to load shipping containers at the Port of Los Angeles Wednesday, April 9, 2025, in Los Angeles. (AP Photo/Damian Dovarganes)

NEW YORK (AP) — No quick dispatching of disease investigators. No televised news conference to inform the public. No timely health alerts to doctors.

In the midst of a hantavirus outbreak that involves Americans and is making headlines around the world, the U.S. government's top public health agency, the Centers for Disease Control and Prevention, has been uncharacteristically missing in action, according to a number of experts.

To President Donald Trump, "We seem to have things under very good control," as he told reporters Friday evening.

To experts, the situation aboard a cruise ship has not spiraled because, unlike COVID-19 or measles or the flu, hantavirus does not spread easily. It has been health experts in other countries, not the United States, who have been dealing primarily with the outbreak in the past week.

“The CDC is not even a player," said Lawrence Gostin, an international public health expert at Georgetown University. “I've never seen that before.”

Not until late Friday did CDC actions accelerate.

Health officials confirmed the deployment of a team to Spain's Canary Islands, where the ship was expected to arrive early Sunday local time, to meet the Americans onboard. They said a second team will go to Offutt Air Force Base in Nebraska as part of a plan to evacuate American passengers from the ship to a quarantine center. Also, the CDC issued its first health alert to U.S. doctors, advising them of the possibility of imported cases.

The CDC's diminished role in this outbreak is an indicator the agency is no longer the force in international health or the protector of domestic health that it once was, some experts said.

The hantavirus outbreak is “a sentinel event” that speaks to “how well the country is prepared for a disease threat. And right now, I’m very sorry to say that we are not prepared,” said Dr. Jeanne Marrazzo, chief executive officer of the Infectious Diseases Society of America.

Early last month, a 70-year-old Dutch man developed a feverish illness on a cruise ship traveling from Argentina to Antarctica and some islands in the South Atlantic. He died less than a week later. More people became sick, including the man's wife and a German woman, who both died.

Hantavirus was first identified as a cause of sickness of one of the cases on May 2. The World Health Organization swung into action and by Monday was calling it an outbreak. About two dozen Americans were on the ship, including about seven who disembarked last month and 17 who remained on board.

For decades, the CDC partnered with the WHO in such situations. The CDC acted as a mainstay of any international investigation, providing staff and expertise to help unravel any outbreak mystery, develop ways to control it and communicate to the public what they should know and how they should worry.

Such actions were a large reason why the CDC developed a reputation as the world's premier public health agency.

But this time, the WHO has been center stage. It made the risk assessment that has told people the outbreak is not a pandemic threat.

“I don’t think this is a giant threat to the United States,” said Jennifer Nuzzo, director of Brown University’s Pandemic Center. But how this situation has played out “just shows how empty and vapid the CDC is right now,” she said.

The current situation comes after 16 tumultuous months during which the Trump administration withdrew from the WHO, has restricted CDC scientists from talking to international counterparts at times and embarked on a plan to build its own international public health network through one-on-one agreements with individual countries.

The administration has laid off thousands of CDC scientists and public health professionals, including members of the agency's ship sanitation program.

As this was playing out, Trump's health secretary, Robert F. Kennedy Jr., said he was working to “restore the CDC’s focus on infectious disease, invest in innovation, and rebuild trust through integrity and transparency.”

The CDC has not been completely silent on hantavirus.

The agency on Wednesday issued a short statement that said the risk to the American public is “extremely low,” and described the U.S. government as “the world’s leader in global health security.”

Said Nuzzo: “Not only was that not helpful, it actually does damage because a core principle of public health communications is humility.”

The CDC's acting director, Dr. Jay Bhattacharya, posted a message on social media that the agency was lending its expertise in coordinating with other federal agencies and international authorities. Arizona officials this week said they learned from the CDC that one of the Americans who left the ship — a person with no symptoms and not considered contagious — had already returned to the state. WHO officials said the CDC has been sharing technical information.

The CDC also is “monitoring the health status and preparing medical support for all of the American passengers on the cruise,” Bhattacharya wrote.

But federal health officials have mostly been tight-lipped, declining interview requests.

In interviews this week, some experts made a comparison with a 2020 incident involving the Diamond Princess, a cruise ship docked in Japan that became the setting of one of the first large COVID-19 outbreaks outside of China.

The CDC sent personnel to the port, helped evacuate American passengers, ran quarantines, shared genetic data on the virus, coordinated with the WHO and Japan, held public briefings and rapidly published reports “that became the world’s reference data on cruise ship COVID transmission,” said Dr. Tom Frieden, a former CDC director.

Some aspects of the international response to the Diamond Princess were criticized, and it did not halt the outbreak or stop COVID-19’s spread across the world. But some experts say it was not for the CDC's lack of trying.

“The CDC was right on top of it, very visible, very active in trying to manage and contain it,” Gostin said, while the agency's work now is delayed and subdued.

Instead of working with nearly all of the world's nations through the WHO, the Trump administration has pursued bilateral health agreements with individual nations for information sharing, public health support, and what it describes as “the introduction of innovative American technologies.” Roughly 30 agreements are currently in place.

That's not sufficient, Gostin said. “You can't possibly cover a global health crisis by doing one-on-one deals with countries here and there,” he said.

Associated Press writers Ali Swenson in New York, Darlene Superville in Washington and Susan Montoya Bryan in Albuquerque, New Mexico, contributed to this report.

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.

Passengers on the the hantavirus-stricken cruise ship, MV Hondius, watch epidemiologists board the boat in Praia, during their voyage to Spain's port of Tenerife, May 6, 2026. (AP Photo)

Workers set up temporary shelters in the area where passengers from the MV Hondius cruise ship are expected to arrive at the port of Granadilla in Tenerife, Canary Islands, Spain, Saturday, May 9, 2026. (AP Photo/Manu Fernandez)

Crew members of the hantavirus-stricken cruise ship, MV Hondius, wait their turns for a first interview with epidemiologists, during the voyage to Spain's port of Tenerife, May 6, 2026. (AP Photo)

Health workers in protective gear evacuate patients from the MV Hondius cruise ship into an ambulance at a port in Praia, Cape Verde, Wednesday, May 6, 2026. (AP Photo/Misper Apawu)

A Spanish Civil Guard officer inspects the area where passengers from the MV Hondius cruise ship are expected to arrive at the port of Granadilla in Tenerife, Canary Islands, Spain, Saturday, May 9, 2026. (AP Photo/Manu Fernandez)