“Bond market collapse is the key background of Trump's tariff postponement decision”

President Trump enacted the 'Trump Put' with the tariff deferral decision (Source: NYT)

An analysis has emerged that the background for President Donald Trump of the United States deferring the policy of reciprocal tariffs on countries other than China by 90 days is decisively influenced by the sharp instability in the U.S. bond market.

On the 10th (local time), CNBC quoted an interview with Kevin Hassett, Chairman of the National Economic Council (NEC) at the White House, and reported that “President Trump is clearly aware that the U.S. economy could fall into recession, and he did not want a recession due to tariff policies,” and “The collapse of the bond market was the motivation for him to temporarily withdraw his trade policy.”

Previously, the 30-year U.S. Treasury yield broke 5% and recorded the highest value since 2023, which was interpreted as a signal reflecting systemic instability across the market beyond the Federal Reserve's rate stance. As a result, government borrowing costs surged, and concerns about contraction in consumption and investment materialized, leading to emergency coordination within the White House.

CNBC, citing multiple sources, reported that “President Trump is well aware in private that overly aggressive tariff policies can lead to a recession,” and “He has reportedly expressed multiple times his desire not to see the U.S. economy retreat due to tariffs.”

This 90-day deferral is officially positioned as “securing time for negotiation,” but the market interprets it as the White House responding to a sharp financial market warning. As a result, attention is focused on whether policy modifications and similar deferral measures will follow in the future.