Commerce Secretary Howard Lutnick announced that President Trump will likely delay tariffs on USMCA-covered products for a month. This indicates a major shift in administrative policy, which has significantly affected market behavior and business confidence. Amidst ongoing trade negotiations, the situation remains fluid with tariffs potentially beginning April 2, depending on progress with Mexico and Canada regarding fentanyl. Market indices also reflect ongoing uncertainty.
On Thursday, Commerce Secretary Howard Lutnick announced that President Donald Trump would likely delay tariffs on products covered under the USMCA agreement for a month. This marks a significant retreat from the administration’s previous economic strategy, which has created turmoil among markets, businesses, and consumers.
Lutnick stated that tariffs, which were recently set at 25% for many products from Mexico and Canada, are now likely to start on April 2 unless notable progress is made addressing the issue of fentanyl trafficking. Following Lutnick’s declaration, stock indexes experienced a slight recovery from initial declines, although they remained in the red for the day, indicating continued market apprehension.
Under Trump’s presidency, market uncertainty has been exacerbated by frequent changes in trade policy, with the Nasdaq down 6.4% and the S&P 500 dropping over 3% since he assumed office. This volatility has led businesses to halt hiring and diminished consumer confidence, prompting investors to shift towards safer assets such as government bonds.
In a recent address to Congress, Trump recognized the unpopularity of tariffs and their potential negative impact on the economy. He urged patience from affected groups, especially farmers, who may face retaliatory tariffs. This inconsistency in tariff announcements has left Corporate America uncertain about investment strategies and hiring decisions.
After beginning his presidency with promises of imposing steep tariffs, Trump’s initial plans met with delays amid negotiations over border security. Although tariffs on China were instituted shortly after, they fell below the anticipated levels. Furthermore, President Trump had outlined a proposal for reciprocal tariffs, but specific details and timelines remain unclear, leading to confusion.
The situation surrounding the steel and aluminum tariffs is similar, set to commence March 12 with no significant changes from previous rates. Investor reactions to new tariffs are being closely monitored by Trump, resulting in further adjustments to policy. The forthcoming tariffs on auto imports from Mexico and Canada have now been suspended for a month.
As of now, all tariffs appear to be on hold until at least April 2, subject to potential changes. This story remains ongoing with developments expected.
In summary, the potential delay of tariffs on USMCA products introduces significant changes in the current trade landscape shaped by the Trump administration. The uncertainty surrounding tariffs has negatively impacted market performance, business hiring, and consumer confidence. As policymakers navigate these complexities, the market continues to respond to evolving trade strategies, highlighting the need for clarity in future economic decisions.
Original Source: www.cnn.com
