Trump U-turn, China tariffs hit Christmas and Moon vs. Mars
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Today, Trump backs down. But what comes after his 90-day reprieve? The trade war is now focused on China. And tariffs could be the Grinch that steals Christmas. And the moon or Mars? NASA's tough choice. It's Thursday, April 10th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes every weekday. I'm Jonah Green in New York.

And I'm Tara Oakes in London. US President Donald Trump is backing away from a full-blown trade war. The U-turn triggering a massive relief rally on financial markets after days of turmoil. But Trump is turning up the heat on China, raising levies on Chinese imports to 125%.

highlighting that the U.S. war on trade is far from over. The upheaval of the past week has erased trillions of dollars from stock markets and led to an unsettling surge in U.S. government bond yields that appeared to catch Trump's attention. Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know? They were getting a little bit yippy, a little bit afraid. Dan Burns is our economics editor.

So, Dan, we've been in crisis mode for a few days, right? Stock sinking, recession fears rising. Is that all on ice now? It does pause some of the uncertainty, but it does not end it.

What happened on Wednesday was a pretty remarkable reversal of the most aggressive portions of the new tariffs that Trump had rolled out only a week ago and that went into effect just in the last 24 hours.

So what's changed is that the draconian 50% on the tiny country of Lesotho and 46% on Vietnam, but also the 26% on South Korea, a major U.S. trading partner, 24% on Japan.

20% on the European Union. All of those levies now go back to the global baseline of 10% for the next 90 days, during which we expect that there will be

a lot of very frenzied negotiations between all these countries and the Trump administration to try to make sure that there isn't some form of snapback at the end of the 90 days. The auto tariffs, the steel and aluminum tariffs, all of those that came in

are all still in place, not affected. The tariffs that Trump had imposed on Canada and Mexico, those tariffs remain in effect. It's hard to argue that this creates a new era or a new moment of certainty for corporate decision makers or households, but it's anybody's guess as to whether this level of

Calm for the moment is something that's sustained over the weeks ahead because we don't know what the ultimate endgame for all of this is still. Investors certainly welcomed Trump's U-turn. The S&P 500 jumped nearly 10% on Wednesday, its biggest one-day gain since the global financial crisis.

But this relief rally comes with a caution sign. Kamal Crimmins explains. Trump's flip-flopping on tariffs has stoked dramatic volatility. We've seen the S&P 500 brought to the brink of a bear market, only to see this huge jump back. Crucially, we've also seen the normally placid U.S. bond market shaken. The jump in yields there, which means higher borrowing costs for consumers in the federal government, was significant.

These are the sorts of moves you normally see in a crisis. But the difference is, unlike in 2008 or in the COVID pandemic in 2020, back then the US led the rescue. This time, the US government was the cause. And that has investors feeling uneasy. While much of the world has breathed a sigh of relief over the tariff turnaround, China is still caught in the crosshairs.

And it might still be April, but just warning you ahead of time, there's a risk that could cancel Christmas. Or at least make it more expensive. Chinese producers of plastic Christmas trees and other festive decorations say orders from U.S. clients should have started to come in by now. But because of the surging import tariffs, they haven't. U.S. retailers are almost completely reliant on China for Christmas decorations.

And if Americans want new Christmas decorations this year, they'll have to pay a lot more for them if they can find them on the shelves at all. Merry Christmas!

Lu Song is owner of the Jiasong Craft Factory, where artificial Christmas trees emerge branch by branch from plastic and thread. He says they're having to proceed with caution because they're worried that even if they get the orders from the U.S., they could eventually be canceled. Jami Warner is executive director of the American Christmas Trees Association. It's unimaginable.

It's scary and we're really not sure how the consumer is going to react to this. But prices will definitely double for all of our products. And we don't know if that's sustainable. I mean, this could be the Grinch that steals Christmas. The Republican-led House of Representatives has postponed a planned vote on a measure that would advance President Trump's tax cut agenda.

Some within the party have complained that the budget blueprint does not contain enough spending cuts. The key message to Donald Trump is Germany is back on track. German conservative Friedrich Merz announcing a coalition deal with the center-left Social Democrats. The deal caps weeks of haggling after Merz's CDU party topped elections in February but fell well short of a majority, with the far-right Alternative for Germany surging into second place.

Rescue efforts continue in Santo Domingo after a devastating roof collapse at a popular nightclub in the capital of the Dominican Republic. Authorities say the search for survivors is expected to take another 24 to 36 hours. And it might have washed over you with all the tariff news, but President Trump has signed an order to lift restrictions on water pressure in showers.

Trump admits he stands to gain from the change. "I like to take a nice shower to take care of my beautiful hair." Which comes first, the moon or Mars? That was a central question at a confirmation hearing in the Senate on Wednesday. Trump's nominee to lead NASA, billionaire CEO Jarek Isaacman, is a close partner of Elon Musk's SpaceX.

He faced a few questions over his ties to Musk, but also how he would balance Trump's focus on Mars with the space agency's moon program. Here's Senator Ted Cruz. If China beats us to the moon, what consequences might America face? If we do not lead the way and we're following, we may be following forever. Joey Roulette is our space correspondent. The agency has invested billions of dollars and picked a bunch of private companies

to get its astronauts back to the Moon for a long-term presence. And the strategy there is to use the Moon for a few missions as a proving ground for eventual missions to Mars. And so the central debate here with Isaacson's nomination is whether NASA stays course with this Moon to Mars strategy or if NASA has more of a focus on Mars and getting to Mars sooner.

And Elon Musk really wants that. He's wanted to colonize Mars ever since he founded SpaceX in 2002. And of course, he has enormous influence with the presidency right now. So if Jared comes in at NASA and changes things up and wants to go to Mars,

that's going to upend several years of private sector progress in believing that the moon is a, you know, potentially a commercial destination. We don't have to make a binary decision of moon versus Mars. In the hearing on Wednesday, he did say that we can do both, which

is something that has kind of been talked about in the past many years, and lawmakers have not liked that at all, just because that's very expensive to do. Why would it matter that China gets to the moon first, as we heard from Senator Cruz?

If China does that, that would be an incredible moment for their own space capabilities. And the US doesn't want to let that happen. They want to remain the space superpower that is still capable of putting their astronauts on the lunar surface. There's also concern about international law and if China lands there first, then they are going to have the biggest say on how lunar governance takes place and takes shape.

Today's recommended read is a photo essay following the story of a young man deported from Paris to Mali. Hundreds of foreign nationals previously protected because they grew up in France now face expulsion under legislation introduced last year. You can read more about the experience of Moussa Sakho by following the link in the pod description. For more on any of the stories from today, check out Reuters.com or the Reuters app.

Make sure to follow us on your favorite podcast player, and we'll be back tomorrow with our daily headline show.