In recent days, US President Donald Trump appears to have softened his hard stance over his administration’s trade policy. Last week, he authorised a 90-day pause in tariffs for the majority of nations, excluding China. In a recent remark, Trump suggested a U-turn on tariffs in the auto sector.
US President Donald Trump on Monday suggested that he might temporarily exempt the auto industry from tariffs which were previously imposed on the sector. The move is likely to allow carmakers the extra time to adjust their supply chains. Speaking to reporters in the Oval Office, Trump said, “I’m looking at something to help some of the car companies with it,” as he added that the car companies “need a little bit of time because they’re going to make them in the US.”
Here’s what Trump’s statement suggest
The statement hints at a potential reversal of Trump’s tariffs from a crucial sector, which has overall panicked financial markets and raised deep concerns from Wall Street economists about a possible recession.
Notably, Trump, who announced the 25 per cent auto tariffs on March 27, described them as “permanent”. Trump has palpably softened his hard stance as he seeks to limit the possible economic and political blowback from his policies.
Trump softens stance on trade
Last week, the US President authorised a 90-day pause over his sweeping tariffs while putting a baseline of 10 per cent on the majority of nations. However, China was excluded from the list as Trump increased the import taxes on China to 145 per cent. Later, he temporarily exempted electronics from some of those tariffs by having those goods charged at a 20 per cent rate.
Trump’s flexible decisions have sparked a sense of uncertainty, with the S&P 500 stock index being up slightly in Monday afternoon trading, but it’s still down nearly 9 per cent this year.
In the wake of US tariffs, China has started to reach out to nations to convince them to collectively counter Trump’s hard stance. Meanwhile, the Trump administration has suggested that its tariffs have isolated China as the US has engaged in talks with other countries.
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.
(With agency inputs)
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