US President Donald Trump signalled on Monday that new auto tariffs will be announced in the coming days while suggesting certain countries may receive exemptions based on reciprocal trade arrangements. The statement marked a potential softening of his tariff stance and triggered a strong rebound in US financial markets, with investors anticipating more targeted rather than blanket measures.
The broader policy of reciprocal tariffs remains on track to take effect on April 2. Last month, the president signed an executive order authorising 25% tariffs on automobile, pharmaceutical, and semiconductor imports, along with an investigation into global trade practices. However, on March 3, he issued a one-month exemption on auto tariffs under the United States-Mexico-Canada Agreement (USMCA), signalling room for manoeuvre.
“I may give a lot of countries breaks,” Trump said, without specifying which nations might benefit. His remarks added to the prevailing uncertainty surrounding the administration’s evolving tariff policy, prompting several governments to step up negotiations with the White House in pursuit of exemptions.
Trump’s latest comments came as US stock markets sought stability after a four-week downturn. Major indices posted strong gains on Monday, with the Nasdaq rising more than 2% and all ‘Magnificent Seven’ tech stocks closing higher. Tesla led the charge, surging 12% on the day, though the automaker remains down 31% year-to-date amid ongoing controversy surrounding CEO Elon Musk’s political involvement.
The US dollar also extended its rally for a fourth straight trading session, buoyed by investor sentiment and reassurance from Federal Reserve Chair Jerome Powell. Following last week’s Federal Open Market Committee (FOMC) meeting, Powell played down the inflationary effects of the new tariffs, calling them ‘transitory.’ His comments, coupled with Trump’s hints at exemptions, helped ease investor fears and bolster both equity and currency markets.
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