Former Treasury Secretary Larry Summers said Wednesday that the U.S. is being treated as a “problematic emerging market.”
“Long-term interest rates are gapping up, even as the stock market moves sharply downwards. This highly unusual pattern suggests a generalized aversion to US assets in global financial markets,” Summers said in a Wednesday morning thread on the social platform X.
“We are being treated by global financial markets like a problematic emerging market,” he added. “This could set off all kinds of vicious spirals, given government debts and deficits and dependence on foreign purchasers. The only way to mitigate these risks is for the President @realDonaldTrump to back off his current path. This is the first US bout of US financial instability caused by the US government.”
Later Wednesday, President Trump ratcheted up tariffs to 125 percent on China and implemented a 90-day pause on “reciprocal” tariffs against all other trading partners after a rocky few days for markets across the globe.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump said on his Truth Social platform.
The decision by the president to halt the higher reciprocal tariffs, which affected 60 countries early Wednesday, resulted in a swift market surge. Shortly after Trump’s post, the Dow Jones Industrial Average rose by 2,000 points.
Treasury Secretary Scott Bessent said to reporters at the White House after Trump’s post that the pause is due to the countries’ desire to negotiate a deal with the Trump administration to reduce their tariffs, with the exception of China.
“Because of a large number of inbound [countries], we had more than 75 countries contact us and I imagine after today, there will be more,” Bessent said
“China is the most unbalanced economy in the history of the modern world and they are the biggest source of the U.S. trade problems,” the Treasury Department secretary added.
The Hill has reached out to the White House for comment.