US President Donald Trump said Monday that auto tariffs would go into effect soon, though he indicated that not all of the levies he has threatened would go into effect on April 2 and that some countries might get waivers, a move Wall Street took as a sign of flexibility on an issue that has roiled markets for weeks.
At the same time, Trump opened another front in the global trade war by imposing secondary tariffs of 25% on any country that buys oil or gas from Venezuela, a directive that sent oil prices soaring.
At the White House, Trump told reporters that not all of the new tariffs would be announced on April 2, and said he might give tariff waivers to "a lot of countries," but gave no details.
A White House official declined to say specifically when sector-specific tariffs on autos, pharmaceuticals or semiconductor chips would go into effect, noting that it was "still to be determined" and "at the president's discretion." The official cautioned against expecting a tariff reprieve, adding, "The president is determined to have very strong reciprocal tariffs." People should expect that."
Bloomberg and the Wall Street Journal reported earlier that the administration was narrowing its approach to a slew of levies that Trump has said for weeks would go into effect on April 2, and could delay sector-specific tariffs.
U.S. stocks ended Monday higher overall on optimism that tariffs detailed next week may not be as extensive as expected. The S&P 500 index rose nearly 1.8% to close at its highest in more than two weeks.
Meanwhile, Trump said the U.S. would impose tariffs on cars, pharmaceuticals and aluminum in the "near future," arguing that the U.S. would need all of those products in the event of a war or other problem.
The auto tariffs would go into effect in the next few days, Trump said later in the day, adding that tariffs on lumber and semiconductor chips would follow "later on."
"We've been ripped off by every country," Trump said after his Cabinet meeting, predicting that the expected tariffs would raise a "significant" amount of money for U.S. coffers, allowing tax rates to stay low or go down.
Trump, who has said countries can still avoid levies if they lower tariffs or move manufacturing to the U.S., also announced on Monday a $21 billion investment by South Korea's Hyundai Motor Group (005380.KS), opens a new tab in the United States.
The investment will include a new $5.8 billion steel plant in Louisiana, he said at the White House with Hyundai Chairman Euisun Chung and Louisiana Governor Jeff Landry.
Trump said the April 2 tariffs would mark a "Deliverance Day" for the U.S. economy. The tariffs are aimed at shrinking the $1.2 trillion global goods trade deficit by raising U.S. levies to the level imposed by other countries and countering their non-tariff trade barriers. Trump said in February he intended to impose auto tariffs of "about 25 percent" and similar duties on semiconductor and pharmaceutical imports, but he later agreed to delay some auto tariffs after the three largest U.S. automakers pushed for relief. Trump's lightning-fast tariff offensive since his inauguration in January has been marked by threats, cancellations and delays, sometimes within hours of a deadline, as his trade team quickly formulates policy. So far, he has imposed new 20% tariffs on Chinese imports, fully restored 25% tariffs on global steel and aluminum imports, and imposed 25% tariffs on imports from Canada and Mexico that are not in compliance with the North American trade agreement over the U.S. fentanyl overdose crisis. (Newsmaker23)
Source: Reuters
