The market remains trapped in the slightest development of President Donald Trump’s tariff strategy. This is the result of uncertainty blanks that try to fill investors with the blanks.
Following weekend reports from Bloomberg and the Wall Street Journal, stocks surged to their highest levels in more than a week on Monday, with the president no longer putting in comprehensive duties on industrial sectors such as automobiles, pharmaceuticals and semiconductors.
Tesla’s shares surged 9.5% on Monday, as they hit both a slump in sales and a backlash against CEO Elon Musk. Previously, the company submitted a letter to Trump’s trade representative, Jamieson Greer, saying it was vulnerable to retaliatory tariffs imposed by other countries in response to Trump’s actions.
A source familiar with Trump’s thinking told NBC News on Monday that the president has yet to make a final decision on the ultimate size of the promised blanket clause, which is expected to be announced on April 2.
Later that day, Trump told White House reporters that tariffs would be announced on cars, aluminum and drugs in the “very near future.”
Stocks in Ford, GM and Stellantis all fell to that announcement, but have since regained the ground.
The president has shown some willingness to tolerate the threat of his tariffs, despite his publicly maintaining pressure. Last week, he showed that there was “a talk” room on tariffs on China, and that daylight remains, although it was intended to impose new duties on longtime US partners.
“I’m not the same, but the word flexibility is an important word,” Trump said in his oval office. “It’s flexible at times, so it’s flexible, but essentially mutual.”
Treasury Secretary Scott Bescent also last week suggesting that the range of countries targeted for the April 2 job is likely to be more limited than previously reported, informing Fox News host Maria Bartiromo that “dirty 15” will affect the “dirty 15,” which refers to about 15% of countries with a permanent trade imbalance with the United States.
In descending order, the US and the largest countries and organizations with trade obstacles are China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada and India.
Trump’s continued openness to negotiations was the reason for the 25% blackmailed missions in Mexico and Canada were ultimately suspended, and was subsequently reduced to include only products that are not covered by the US-Canada trade agreement.
Trump has also proven to accept pleading from major auto companies about how dramatically the impact of tariffs with neighbors in the Northern and Southern America is on their business.
The UK’s trade minister was scheduled to meet with White House officials to discuss the outlook for a technology-focused bilateral trade agreement, Reuters reported last week. Bloomberg said Monday that the EU trade director is also expected to meet with White House officials on Tuesday.
This week, US officials are also in India as part of an ongoing trade talks.
South Korean conglomerate Hyundai was also planning to announce a $20 billion investment in the US coast, including a new steel factory.
Heading on Monday, despite the many threats of imposing more tariffs, only the steel and aluminum tariffs and higher obligations on Chinese goods have come into effect.
Whatever its final form, the president’s tariff strategy continues to postpone the outlook for economic growth. The S&P Global Financial Group said on Monday that it will be the second-lowest year since October 2022 in March, as it “is increasingly cautious about its economic outlook and cites concerns about customer demand and the impact of the new administration’s policy aspects.”
According to another S&P Global Report, tariffs currently dominate the company’s revenue call, with a number of references to trade issues rising to around 900 due to fourth quarter discussion.
“The near-universal intention to pass higher tariffs through prices means that inflation will occur. Or, if the pricing environment is more resistant, the profit margins of a company will start to feel pressure,” S&P analysts write.
And last week, the Federal Reserve suggested that tariff threats are putting upward pressure on price growth, but to what extent it was not clear. Fed Chairman Jerome Powell also said accelerated inflation could ultimately prove “temporary” depending on the ultimate range of tariffs.