Treasury Secretary Scott Bessent confirmed countries that were handed a 10 per cent tariff at the outset, such as Australia, would continue to have their exports taxed at that rate. “That’s going to remain,” he said.

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Countries most impacted by the backdown include Japan and South Korea, which had been given tariffs of 24 and 25 per cent respectively, India (26 per cent), Vietnam (46 per cent) and the European Union (20 per cent). Tariffs on Mexico and Canada – which were excluded from the reciprocal tariff program – were unaffected.

US sharemarkets, which had lost trillions in value since Trump unveiled the larger-than-expected tariffs last Thursday, skyrocketed within moments of the backflip. The Nasdaq, Dow Jones and S&P500 all rallied more than 6 per cent, with the Nasdaq climbing as much as 10 per cent in early afternoon trade.

Asked about the administration’s dramatic policy reversal, Bessent said Trump had “created maximum negotiating leverage for himself”.

“It took great courage for him to stay the course until this moment,” he said. “As I told everyone a week ago … do not retaliate and you will be rewarded.”

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Bessent said the administration had been overwhelmed by the response from US allies. But the only certainty he could give them was the US would now negotiate in good faith.

“We will see what China does,” he said. “What I’m certain of is that what China is doing will affect their economy much more than it will ours because they have an export-driven, flood-the-world-with-cheap-exports model.”

White House press secretary Karoline Leavitt said more than 75 countries had contacted the administration to negotiate trade deals and attacked reporters for what she cast as their insufficient faith in Trump’s strategy.

“Many of you in the media clearly missed the art of the deal. You clearly failed to see what president Trump is doing here,” she said.

“You tried to say the rest of the world would be moved closer to China when in fact we’ve seen the opposite effect. The entire world is calling the United States of America, not China.”

The previous night, at a black tie Republican Party function in Washington, Trump boasted world leaders were ringing up and “kissing my ass” to strike a deal on the tariffs.

In his TruthSocial post announcing the reversal, Trump said China had shown a lack of respect to world markets and would therefore be hit by a 125 per cent tariff, effective immediately.

“At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other Countries, is no longer sustainable or acceptable,” he wrote.

“Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States … to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorised a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10 per cent, also effective immediately.”

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