WASHINGTON (AP) — On Monday, President Donald Trump indicated that he might consider temporarily exempting the automobile industry from the tariffs he previously enacted, in order to provide car manufacturers with time to adapt their supply chains.
“I’m considering options to assist some of the automotive companies with this,” Trump told reporters in the Oval Office. The Republican president mentioned that automakers required time to shift production from Canada, Mexico, and other regions, stating, “They need a little more time because they plan to produce them here, but they require a bit of time. So I’m thinking about measures like that.”
This announcement suggests yet another potential reassessment of tariffs, as Trump’s ongoing series of import taxes has caused turmoil in financial markets and raised significant concerns among Wall Street economists regarding the risk of a recession.
When Trump introduced the 25% auto tariffs on March 27, he referred to them as “permanent.” However, his once rigid stance on trade appears to be softening as he seeks to mitigate possible economic and political repercussions from his policies.
Last week, following a major bond market sell-off that increased interest rates on U.S. debt, Trump announced that for 90 days, his broader tariffs against multiple countries would revert to a baseline rate of 10% to allow for negotiations.
Simultaneously, Trump raised the import tariffs on China to 145%, although he temporarily exempted electronics from some of those tariffs, setting those goods at a 20% rate.
“I don’t typically change my mind, but I am flexible,” Trump stated on Monday.
His flexibility has contributed to a prevailing sense of uncertainty and confusion regarding his intentions and ultimate goals. The S&P 500 stock index saw slight gains during Monday’s afternoon trading, but remains down nearly 9% for the year. Interest rates on 10-year U.S. Treasury notes also stayed high at around 4.4%.
Carl Tannenbaum, chief economist at Northern Trust global financial firm, remarked that the volatility was so significant that he might need to “get fitted for a neck brace.”
Tannenbaum cautioned in a report: “Damage to consumer, business, and market confidence may already be irreversible.”
Maroš Šefčovič, the European commissioner for trade and economic security, tweeted on Monday that he participated in trade discussions representing the European Union with Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer.
“The EU remains constructive and ready for a fair agreement — including reciprocity through our 0-for-0 tariff proposal on industrial goods and addressing non-tariff barriers,” Šefčovič stated.
The U.S. president also mentioned that he recently spoke with Apple CEO Tim Cook and “assisted” him. Many Apple products, including the popular iPhone, are assembled in China.
Apple did not respond to a request for comment on the recent fluctuations in the Trump administration’s tariff policy.
Even if the recent exemptions for electronics prove temporary, they provide Apple with an opportunity to strategize ways to lessen the trade war’s effects on its iPhone sales in the U.S.
This outlook contributed to a nearly 3% increase in Apple’s stock price during Monday’s afternoon trading, though it fell back from an earlier 7% rise as investors considered the likelihood of more tariffs impacting Chinese-made products in the near future.
Wedbush Securities analyst Dan Ives noted that Apple appears to be in a much stronger position than it was a week ago, but he cautioned that there remains “mass uncertainty, chaos, and confusion regarding the next steps.”
One option Apple may be exploring during this tariff reprieve is to further shift its iPhone production from its traditional centers in China to India, where it began to scale up manufacturing during Trump’s first term amid the trade conflict.
The Trump administration has asserted that its tariffs have effectively isolated China while the U.S. engages in dialogues with other nations.
However, China is simultaneously working to forge closer ties in Asia with countries impacted by Trump’s tariffs. On Monday, Chinese leader Xi Jinping met in Hanoi with Vietnam’s Communist Party General Secretary To Lam, delivering the message that trade wars benefit no one.
When asked about the meeting, Trump suggested that the two nations were colluding to economically undermine the U.S. by “trying to figure out how to screw the United States of America.”
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Liedtke reported from San Francisco.
