When it comes to tariffs, President Trump is a creature of habit.

He first rolls out new levies with bluster. He claims they will solve a major problem: They’ll help stop fentanyl trafficking across the Mexican and Canadian borders. They’ll bring back manufacturing. They’ll rebalance trade. They’ll collect trillions in revenue.

Soon, the markets panic. Investors worry about the higher prices and lower economic growth that tariffs will cause. Stocks tank. Business leaders call the White House to complain — or, worse, vent publicly about Trump and his methods.

Then, the president rolls back his plans. We reached that final stage yesterday. Trump paused his so-called reciprocal tariffs on every nation but China for 90 days. The move leaves a universal 10 percent tariff on all other countries except Canada and Mexico, which face separate duties. But it undoes some of the most shocking tolls — 20 percent on the European Union, 24 percent on Japan, 46 percent on Vietnam.

Markets rallied at the news. The S&P 500, which had flirted with bear-market territory, shot up almost 10 percent. But stocks haven’t fully recovered from the chaotic “Liberation Day” announcement last week, and the United States remains in an open trade war with China, which faces a 125 percent penalty on its goods. And what happens when the pause ends? Today’s newsletter looks at the fallout from this latest tariff episode.

The Port of Los Angeles.Credit…Maggie Shannon for The New York Times

From the start, the president has faced one key question about his plan: What’s the point?

On the campaign trail, Trump spoke about the need for tariffs to revitalize U.S. manufacturing, and JD Vance fantasized about once again making toasters in America. Trump also said the tolls would bring in tax revenue.

Simulated change in G.D.P. after three years of 10% tariffs

A chart shows simulated changes in G.D.P. after three years of a 10 percent rise in tariffs between the United States and all other countries. The U.S. would lose more than every major economy except Mexico.

Source: O.E.C.D. Economic Outlook

By The New York Times

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