 "Trump hints at temporary auto tariff exemption as supply chain chaos rattles markets")
President Donald Trump on Monday indicated he may temporarily exempt the auto industry from his 25% tariffs to give carmakers time to adjust their supply chains.
Speaking at the White House, Trump said manufacturers needed time to shift production from countries like Canada and Mexico back to the US, adding, “They need a little bit of time because they’re going to make them here, but they need a little bit of time. So I’m talking about things like that.”
The statement hinted at yet another round of reversals on tariffs as Trump’s onslaught of import taxes has panicked financial markets and raised deep concerns from Wall Street economists about a possible recession.
The move comes amid growing market anxiety over his aggressive trade measures, which economists warn could trigger a recession. Last week, Trump similarly eased broader tariffs to 10% for 90 days following a bond market sell-off.
At the same time, Trump increased the import taxes on China to 145%, only to temporarily exempt electronics from some of those tariffs by having those goods charged at a 20% rate.
“I don’t change my mind, but I’m flexible,” Trump said Monday.
Trump’s flexibility has also fueled a sense of uncertainty and confusion about his intentions and end goals. The S&P 500 stock index was up slightly in Monday afternoon trading, but it’s still down nearly 9% this year. Interest rates on 10-year U.S. Treasury notes were also elevated at roughly 4.4%.
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View AllCarl Tannenbaum, chief economist for the Northern Trust global financial firm, said the whiplash had been so great that he might have to “get fitted for a neck brace.”
Tannenbaum warned in an analysis: “Damage to consumer, business, and market confidence may already be irreversible.”
The U.S. president also said that he spoke with Apple CEO Tim Cook and “helped” him recently. Many Apple products, including its popular iPhone, are assembled in China.
The Trump administration has suggested that its tariffs had isolated China as the U.S. engaged in talks with other countries.
But China is also seeking to build tighter relationships in Asia with nations stung by Trump’s tariffs. China’s leader, Xi Jinping, on Monday met in Hanoi with Vietnam’s Communist Party General Secretary To Lam with the message that no one wins in trade wars.
Asked about the meeting, Trump suggested the two nations were conspiring to do economic harm to the U.S. by “trying to figure out how do we screw the United States of America.”
With inputs from agencies
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