And me, Sumi Somaskanda, here in Washington.

In the next 30 minutes, we're going to be asking and hopefully answering some of the key questions about the Trump tariff rollercoaster of the last few days.

Yeah, why, for example, did he impose them with such flourish last week, only to then put them on pause just a few hours after they actually came into effect?

Was it a retreat forced on President Trump by the turmoil that we've seen, especially in the crucial bond markets, or was it his strategy all along, as the White House has been suggesting, successfully driving dozens of countries to the negotiating table?

And there may have been a rollback on American tariffs for the rest of the world, but why has Donald Trump doubled down on China with even steeper tariffs?

In fact, the White House confirming today that the tariff rate for China is now 145 percent, a staggering number.

So are we now witnessing an all-out trade war that is escalating at dizzying speed between the two biggest economies in the world, China and America?

And if we are, which of them will blink first?

So key questions to ask there.

With President Trump changing up tariffs over the last few days, let's take stock, Ben, of where we are right now.

That would be helpful, wouldn't it?

The highest U.S. tariffs in a period on pause for three months rolled back to a base of 10 percent for most of the countries in the world, except China, which now, as we just mentioned, has that 145 percent tariff on the products it sells in the United States, while in return, China has put tariffs of 84 percent on products coming in from America.

By the way, the original higher tariffs of 25 percent on Mexico and Canada, we understand at this point, still stand.

Also, tariffs of 25 percent are still in place on all aluminum and steel imported to the United States.

Well, as far as the European Union is concerned, it has now put on hold its planned retaliatory tariffs against the United States in return for the olive branch that was offered by Donald Trump.

The EU has now held out an olive branch of its own.

Well, when it came, President Trump's spectacular U-turn on tariffs did come as a surprise.

But what forced him into that apparent climbdown?

Many financial experts believe it was the turmoil on the all-important bond market, which was dramatically increasing America's long-term borrowing costs on its national debt of more than 30 trillion dollars.

Well, let's talk to Darshini David then, who is our deputy economic senator with me in the studio.

Well, two questions, really, I suppose, Darshini.

What did force that retreat by Donald Trump?

And what are we left with?

Is this essentially now a bilateral trade war between America and China?

Gosh, big questions there, Ben, and we've only got a little bit of time to answer them as well.

Let's start with the first one.

What forced his hand?

Now, he talked about the markets being queasy.

He meant the bond markets, of course, that the bonds being the things that governments use to borrow money on financial markets.

Now, they're normally seen as a very safe haven for investors in times of strife, so governments only have to offer a very low interest rate on them.

What we saw happening in the last couple of days is a lot of sellers actually in that market, a lot of people offloading those bonds, which caused some alarm and some questions about financial stability in the U.S. potentially further down the line.

So therefore, many are thinking that that actually spooked the President.

Also, a big holder of those bonds is China.

So was China actually retaliating in that way?

So has he tried to slow the markets down by announcing this pause?

You heard that phrase, it's all about the art of the deal.

But let me tell you, when you talk to businesses out there, what they actually say is that he's created this vacuum now in which uncertainty is thriving and therefore they're paralyzed by fear and anxiety.

Do they invest?

Do they actually get the kind of machinery, upskill workers in the way the President wants to guarantee the long-term success of America?

Or frankly, will they be wrong-footed in perhaps maybe a matter of not days, but hours?

So if that was actually his aim, then quite frankly, it may be backfiring.

And on China, I mean, these tariffs were 125%.

The White House say actually the total when you take into consideration earlier tariffs of 20%, it all adds up to 145.

I mean, it's whopping, it's eye-watering, whatever numbers you look at.

And we are in this trade war now between the United States and China, the two biggest global economic powers.

What are the consequences of that for the rest of the world?

Huge, Ben, in a sentence, or in a word, rather.

Do you remember that phrase, conscious uncoupling?

I think it was Gwyneth Paltrow who used it about her divorce many years ago.

This is what's happening here.

China and the US between them account for a third of global goods, right?

So you've got this, basically this separation between the two of them getting deeper and deeper and deeper.

And as a result of that, what you're seeing is disruption on either side.

Now, we're hearing all sorts of reports about Chinese companies rushing to try and relocate production, for example, or figure out how much extra they can charge American consumers without, frankly, going bust.

And that can cause all sorts of disruption given the global nature of supply chains, given that these companies sell all over the world to buyers around the world too.

American consumers account for one in six, seven dollars of all of those spent in the world.

So if they're not buying, other countries aren't selling.

So this may look like it's kind of slightly, you know, over there, thousands of miles away from many countries, and there's a pause elsewhere.

But let's not forget, there are some severe consequences that many are going to feel in the weeks and months to come.

All right, Darshini, for the moment, thank you very much indeed.

Darshini David there, our Deputy Economics Editor.

All right, we have been watching the dramatic ups and downs of financial markets.

So let's take stock of where things stand.

Financial markets in Asia and Europe, they have made gains reflecting relief at Donald Trump's decision to suspend those additional reciprocal tariffs for 90 days.

This is how the key European indices have closed.

In London, the FTSE 100 was up 3 percent.

In Germany, the DAX index was up 4.5 percent, while in France, the CAC 40 was up 3.8 percent.

Here in the U.S., at times, the Dow Jones was down more than 5 percent.

The S&P 500 is down more than 4.5 percent.

The Nasdaq at the moment, more than 5 percent.

And that fall contrasts with some of those really big gains that we saw made on Wednesday directly in response to Donald Trump reversing that decision to impose many tariffs on countries other than China.

So let's take a closer look at how markets are reacting to all of the twists and turns.

We can go to our North America business correspondent, Erin Delmore, who is in New York for us.

Erin, we've been speaking pretty much every day about the market's reaction to the tariff policies.

Can you characterize where things stand right now?

Sumi, gone is the euphoria from yesterday's trading session when we saw all three major U.S. indexes rally to highs, some not seen since 2020, some 2008.

The Nasdaq, you have to go back to 2001.

But, Sumi, today is a different story.

And the sell-off that we're seeing on Wall Street actually cuts in half those gains from yesterday.

I want to draw a couple of goalposts for you.

So right at this moment, we're seeing the S&P down 232 points.

Now, at the session high today, it was down 103 points.

At the session low, 341 points.

So that shows you sitting right about in the middle of the trading session today.

But I want to point out, we saw an accelerated sell-off after the White House confirmed that China's effective tariff rate had gone up to 145%.

There had been some question of whether the 125% increase was on top of the earlier issue 20% that the administration attributes to policing the fentanyl crisis.

And sure enough, those stacked.

So when we saw news that it was going to be 145% on China, we saw stocks sink even lower.

Now, hear the president talk about strategy, because, Sumi, that is what investors want to hear.

What is the path ahead?

He said that there was going to be a transition cost.

He said that there were going to be even transition problems.

So investors want to know, is the transition problem the gains that have been sliced off yesterday's rally, or are there more to come?

And that uncertainty has everybody on pins and needles here.

So for now, the turbulence continues.

Our North America business correspondent, Aaron Delmore, in front of the New York Stock Exchange there.

Thank you, Aaron.

Well, Darshini, our Deputy Economics Editor, is still with me.

We were hearing Donald Trump talking to his cabinet about there will be a transition cost to all of this, his tariffs policies.

There will be transition problems.

Well, we've certainly seen some of that.

But on the upside, the White House is saying they've got all these countries queuing up to do business with America to do trade deals.

Do you think that's true?

Do you think that's right?

Well, we do know that certain countries have approached the US.

We heard the Israeli Prime Minister there, didn't we, earlier in the week at the White House saying, look, we've had a chat about things we could do to try and bring down some trade barriers.

So there is no doubt that many countries are having these discussions.

You've got to wonder how many trade negotiators there are in the US and if they're going to have time in these 90 days to actually sort much out.

But there will be things, concessions made.

The question is, do we go back to where we were before?

And the answer seems to be from all the architects of trade policy who've worked with President Trump that I've talked to, the answer seems to be no.

They say the idea of zero for zero, zero tariffs, doesn't make any sense as far as the President is concerned.

He wants to see businesses relocate manufacturing to the US and jobs to the US.

And he says, unless you put some tariffs in place, that simply doesn't make business sense for American business.

All right, Darshini, once again, thank you very much indeed.

We've been looking at the economics of all of this.

Let's take a look at the politics now and what's been happening inside the White House.

President Trump's explosive announcement on tariffs last week caused shockwaves around the world, but it also seems to have ignited some tensions among key figures in his administration.

We've seen the Treasury Secretary, Scott Besant, for example, with some dissonance in his messaging compared to what the President has been saying.

And Elon Musk, the world's richest man and also a close adviser to Donald Trump, he clashed with another one of Donald Trump's senior advisers, the trade czar Peter Navarro.

Take a look.

Mr. Musk, who advocates free trade, called Mr. Navarro a moron and, quote, dumber than a sack of bricks, while Mr. Navarro said Elon Musk isn't a car manufacturer, he's just a car assembler who wants to keep importing cheap foreign parts for his products.

So let's talk about the politics of all of this now with our North America correspondent, Anthony Zerker, who is following the latest.

Anthony, very good to have you on.

We heard the White House press secretary say when asked about this spat between Elon Musk and Peter Navarro that boys will be boys.

But what does this actually tell us about the tariff policy and how the administration, Republicans and the President feel about it?

I think it tells you that there's some conflict within Donald Trump's inner circle.

Donald Trump doesn't necessarily have a problem with that.

Sometimes he actually encourages his advisers, people in his staff to kind of go at each other.

He enjoys the conflict.

He likes being able to float above it and then make the decisions based on what he sees.

But I think there are different factions in this White House, and some of them, including Scott Besant and others, are in favor of a more restrained trade policy.

They want to support tariffs.

But then you see other sides advocating a much more aggressive trade policy, Peter Navarro being one of the leading members of that group.

And so now it seems like at least the folks who are preaching caution, the folks who are telling Donald Trump to take a step back and let the markets cool off a little bit, they have the upper hand.

Anthony, we've seen at least two explanations for what we saw at the White House on Wednesday.

It was either the art of the deal, as we've heard from the Trump administration, or a U-turn, as Democrats say, a climb down from the president.

What do we actually take away from all of this?

Has any of this weakened President Trump's position?

I think it was a dramatic reversal, and I think that fosters views that this administration is not being consistent.

And one thing, when you're applying these tariffs, if you want American businesses to start making decisions based on the moves of these tariffs, they have to know that they're going to be there, that they're not going to change overnight, because they're going to be building factories, for instance, to produce things on American soil.

And if the tariff policies change in the middle of that construction, it could leave them high and dry.

I think you did hear from members of the administration say this was an art of the deal.

This is where they wanted to be to begin with.

They were bringing people to the negotiating table, allies, South Korea, Japan, the EU, meanwhile, focusing attention on China as being the big villain here.

But Donald Trump kind of undercut all of that yesterday afternoon when he came out and talked about queasiness in the markets, and people were getting a little bit afraid, and they were getting yippy, and that the bond market, what was happening with the instability in the bond market, was one of the reasons why Wednesday morning he made the decision from his heart, he said, not with lawyers, but from his heart, to dial things back.

And that definitely undercut all of these, this was our grand plan type of explanations.

And Anthony, polling generally lags a few weeks behind, so we don't always have a snapshot that's up to date.

But what can we take away from what Americans, average Americans, think of all of this?

Well, we're starting to see some polls come out in the middle of this week that were in the field at the beginning of Donald Trump's move on tariffs.

And they do show that the United States public is concerned, is a little more apprehensive about what Donald Trump is doing.

His overall approval ratings have dipped somewhat.