Commerce Secretary Howard Lutnick announced a likely one-month delay on tariffs for products under the USMCA agreement, following a 25% tariff implementation. Market reactions reflect uncertainty about Trump’s trade policy, contributing to declines in consumer confidence and business investments. Tariffs are now slated for April 2, contingent on progress in addressing border issues related to fentanyl.
On Thursday, Commerce Secretary Howard Lutnick indicated that President Trump would likely announce a one-month delay on tariffs affecting all products under the USMCA free trade agreement. This decision marks a stark reversal of the administration’s economic strategy, previously characterized by extensive tariff implementation, which has unsettled markets and consumers alike.
Lutnick stated that the initial 25% tariffs imposed on treaty-compliant goods from Mexico and Canada would be postponed, with their implementation now targeted for April 2, contingent on progress regarding the border fentanyl crisis. Following this announcement, stock markets reacted negatively, though some losses were mitigated. The Dow experienced a decline of approximately 100 points (0.3%), while the S&P 500 and Nasdaq fell by 0.6% and 0.7%, respectively.
The prevailing uncertainty surrounding trade policy during Trump’s presidency has contributed to a downward trend in the market. Since Trump’s inauguration, the Nasdaq index has decreased by 6.4%, with the S&P 500 declining over 3%. Business hiring has slowed, consumer confidence has diminished, and investors are increasingly opting for safer investments such as government bonds.
During a recent address to Congress, Trump acknowledged the unpopularity of tariffs, warning of potential adverse effects on already struggling consumers. He urged farmers facing retaliatory tariffs to “bear with me,” indicating a desire for patience amidst economic challenges. The fluctuating nature of tariff announcements has left businesses puzzled regarding future investments and hiring decisions.
Initially campaigning on the promise of significant tariffs, Trump issued executive actions upon taking office to investigate the proposed tariffs. A signing ceremony earlier indicated the introduction of 25% tariffs on goods from Canada and Mexico by February 1, but subsequent negotiations led to delays.
Tariffs on China were implemented on February 4 at a reduced rate and altered regulations regarding de minimis exemptions for low-value imports. Initially, the U.S. Postal Service ceased deliveries from China but later reversed this decision. Trump’s plans for reciprocal tariffs remain largely undefined, as detailed guidelines and timelines are still pending.
Additionally, Trump initiated steel and aluminum tariffs set for March 12; however, these changes do not significantly increase existing tariffs. In response to the latest tariffs on Mexico and Canada, stocks plummeted, prompting Trump and his team to monitor market performance closely. The recent tariff delays suggest ongoing changes in strategy, with developments to be monitored closely.
In summary, a major delay on tariffs affecting goods from Mexico and Canada appears imminent, reflecting a shift in the Trump administration’s economic policy. Market reactions have been influenced by such uncertainties, leading to declines in consumer confidence and investment. Businesses are grappling with the implications of these tariff adjustments, seeking clarity amidst fluctuating policies. Continuous monitoring of the situation is necessary as developments unfold.
Original Source: www.cnn.com
