Markets saw a boost this week after the U.S. government eased tariffs on consumer electronics from China. Over the weekend, smartphones, laptops, and other key products were removed from Trump’s tariff list. On Monday, the former president hinted at possible exemptions on auto-related tariffs as well, signaling a shift in his otherwise aggressive trade approach.
Trump noted during a White House appearance, “They’re going to make ‘em here,” referring to car manufacturers. He suggested companies need more time to adapt to U.S.-based production before facing further levies.
Tariffs Trigger Market Jitters
Previously, the 25% tariffs proposed on a wide range of imports had spooked markets, causing a drop across stocks, the dollar, and Treasury bonds. The broader S&P 500 index, although recovering Monday, is still down about 8% for the year.
Economists and analysts expressed concerns about the uncertainty caused by the administration’s back-and-forth. “Not only is the scope of the tariff globally hard to grasp, but the uncertainty means businesses will have little confidence in their planning,” said Morgan Stanley economists.
Auto Industry Caught in the Crossfire
U.S. automakers like General Motors and Ford, heavily reliant on a cross-border supply chain, have been particularly affected. Shares of GM and Ford jumped 3.5% and 4.1% respectively following Trump’s remarks.
Matt Blunt, head of the American Automotive Policy Council, emphasized the potential consequences: “There is increasing awareness that broad tariffs on parts could undermine our shared goal of building a thriving and growing American auto industry, and that many of these supply chain transitions will take time.”
Tech Sector Sees Renewed Optimism
Tech stocks also saw a rebound. Apple rose 2.2% after suffering a 9% decline over two weeks due to concerns about potential iPhone price hikes, as the product is primarily manufactured in China. HP and Dell gained 2.6% and 4%, respectively, while Nvidia edged slightly lower.
Intel shares climbed as much as 6.5% after the company sold its majority stake in Altera for nearly $4.5 billion. Nvidia, meanwhile, announced plans to increase U.S. investment in AI infrastructure—a move Trump credited to the tariff pressure.
Global Ripple Effects
Asian tech stocks, especially those linked to U.S. firms, also advanced. Foxconn, the main iPhone assembler, gained 3%, Quanta rose 5.8%, and AI server manufacturer Inventec increased 4.1%.
Trump’s administration hinted at further trade actions, launching investigations into imports of pharmaceuticals and semiconductors. These moves could precede new tariffs aimed at safeguarding national security.
BlackRock analysts warned that the lingering uncertainty could damage long-term investments. “Prolonged uncertainty raises the risk of recession. It may drag on corporate investment and delay longer-term commitments,” they wrote.
While exemptions on electronics offer a temporary reprieve, many sectors remain on edge as the administration’s trade stance continues to evolve.