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the global stock market let out a
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massive sigh of relief yesterday as
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Trump announced a 90-day pause on almost
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all higher rates of tariffs What that
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means is that the big menu of levies
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printed out on Trump's big chart from
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last week is now largely moot for now at
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least And although it might feel like
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one of those films where the main
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character wakes up from a bad dream and
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none of it ever happened trillions of
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dollars have been wiped off the stock
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market But this is the news that
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investors have wanted to hear for days
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now The Footsie 100 is up more than 6%
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today and the UK government is promising
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to negotiate cooly and calmly On which
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note Trump told a group of Republican
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senators last night "Countries are
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calling me up kissing my ass They're
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dying to make a deal." But ass kissing
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aside the EU welcomed the decision with
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Ursula Vanderlayan saying "Clear
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predictable conditions are essential for
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trade and supply chains to function."
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Speculation has been mounting throughout
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the week that the situation was
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essentially unsustainable and this pause
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would have to come And investors had
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been so hopeful about a deal that on
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Monday the Dow Jones briefly spiked up
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2% because a Trump economic adviser had
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refused to rule out the pause in an
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interview on Fox News It is worth
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emphasizing that the baseline 10% tariff
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is still in place This was the level
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that the EU was already going to be hit
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by so no change on that front That 10%
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by itself could be enough to cause major
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economic trouble with the US recession
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very much still on the cards and that
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25% tariff on automotive imports and on
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aluminium and steel that's still in
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place There is one big exception to
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Trump's about turn on trade and that is
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China Duties on Chinese imports into the
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US are now set at a staggering 125% and
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Chinese tariffs on US imports have been
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jacked up to 84% Trump says that he
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believes that China wants to make a deal
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with him and that Xi Jinping is a very
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smart man So Trump has shown that he has
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the power to genuinely move markets But
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with this pause in tariffs there is at
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least a brief pause from days of brutal
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financial shocks For everything you need
2:04
to know about this story as it develops
