CNN
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If you don’t like President Donald Trump’s tariff policy, wait a minute.
Just after the stock market had its second freak-out in a row, just after businesses around the country planned “what are we going to do now” board meetings, just after Canada and China retaliated with tariffs of their own, just after Republican members of Congress pleaded with the administration to dial down its trade policy, just after the International Chamber of Commerce warned of a Great-Depression-like economic catastrophe, the Trump administration appeared to change its mind on its massive tariffs on its biggest trading partners.
Maybe. We’ll see.
Commerce Secretary Howard Lutnick Tuesday evening made a stunning statement: Canada and Mexico had been blowing up his phone all day, and he believes Trump is “probably” ready to announce Wednesday that he’ll meet America’s neighboring nations halfway on tariffs.
“I think he’s going to work something out with them,” Lutnick said on Fox Business Tuesday. “It’s not going to be a pause, none of that pause stuff, but I think he’s going to figure out, you do more, and I’ll meet you in the middle some way.”
On Wednesday, in an interview with Bloomberg, Lutnick clarified that Trump is “thinking about a plan” that he’ll decide and announce later this afternoon that could keep tariffs at 25% on Mexico and Canada but could include certain product exemptions, including autos.
“The president gets to make the decision,” Lutnick said. “There will be some categories that will be left out. It could well be autos.” Shares of GM, Ford, Toyota, Honda and Stellantis, which have been rocked by tariffs over the past few days, shot higher in morning trading Wednesday.
Lutnick had left the door open to a walkback on tariffs for days. Even as Trump insisted that tariffs would go into effect in full force on Mexico and Canada Tuesday, Lutnick had suggested on cable network interviews that maybe some tariffs would go into effect, or perhaps the percentage would be lower to start.
Nope. Trump at midnight Tuesday morning enacted massive 25% across-the-board tariffs on all goods from Mexico and Canada (save Canadian energy, which got a lower tariff). He also added 10% to the existing tariffs on Chinese goods.
Wall Street was seriously unhappy — the Dow fell 1,300 points in two days. Business leaders, a contingent that has largely supported Trump, spent hours griping in press releases and on CNBC.
Members of Trump’s own party, who were hearing it from their constituents, pleaded with the administration to backtrack. White House chief of staff Susie Wiles and other top advisers were on the phone with Congress members “all day long,” one senior administration official told CNN, with some of the loudest concerns coming from members of Congress representing the agriculture and manufacturing sectors.
It might have worked. We’ll see. Trump is scheduled to speak with Canadian Prime Minister Justin Trudeau on Wednesday morning, a person familiar with the call told CNN. But more details of a trade compromise need to be worked out before the leaders speak, Canadian industry and government sources tell CNN.
Among the issues that need to be worked out: Enhanced border security provisions and exemptions on tariffs for everything that is compliant the the free-trade USMCA treaty.
Stocks are rallying Wednesday morning in pre-market trading.
A familiar scene
We’ve been here before.
Trump campaigned on steep tariffs on Day One, but he failed to deliver on that promise. Instead, he signed several executive actions on his first day in office ordering his administration to investigate whether to pursue tariffs on a wide range of goods. But in a signing ceremony, Trump announced that 25% tariffs on Canada and Mexico would be coming February 1.
Then February 1 came, and rather than the promised tariffs, Trump announced tariffs would come February 4. Then, on the eve of the tariffs, Trump announced monthlong delays on Canadian and Mexican tariffs after both countries sent delegations to negotiate, offering minor increases to existing border security and promises to take more action to restrict fentanyl crossing into the United States.
Tariffs on China went into place February 4 — but not at the 60% level Trump had promised in December. The 10% tariffs came with a surprising twist: The elimination of the de minimis exclusion, a loophole that allows goods valued at less than $800 to come over the border duty-free. Those packages are numerous and onerous for customs officials to scan for tariffs.
The next day, the US Postal Service stopped all package deliveries from China from entering the United States because it was unable to abide by the new trade policy. But hours later, the de minimis exclusion was back on — temporarily — until the Commerce Department could determine how to police it.
Then, Trump promised a “big one,” as he called it: reciprocal tariffs — matching foreign countries’ tariffs dollar for dollar.
Instead, the plan, as it were, which Trump announced in the Oval Office on February 13 to much fanfare, consisted of a vaguely worded memo that offered few concrete details and no real timeframe for those tariffs to kick in. Eventually the timeframe — April 2 — became clearer, but the tariffs that would be applied and the countries that would be subjected to the reciprocal tariffs remain somewhat of a mystery. Trump has floated autos, microchips, pharmaceuticals and lumber, but specifics remain sparse. Stocks surged that day as investors celebrated a tariff policy that appeared to be a lot of bark with no bite.
Trump also announced steel and aluminum tariffs that are set to go into place March 12. But they don’t represent a significant increase over what was already in place.
And then March 3 came around, and the president who cried tariffs was expected to announce some kind of rollback, pause, delay or softened tax.
Instead, to Wall Street’s surprise, additional tariffs were put into effect. At least for now.
The back and forth has created volatility on Wall Street, confusion for consumers and massive amounts of uncertainty for businesses, who are paralyzed by their inability to plan for what’s next. Trump in his joint address to Congress Tuesday night acknowledged that tariffs are unpopular and could cause some pain. In one of his more vulnerable moments during the speech, Trump pleaded for patience, asking farmers who could be hurt by retaliatory tariffs to “bear with me,” and said “there will be a little disturbance.”
Now, Wall Street is celebrating Lutnick’s apparent good news. But it’s unclear how long investors will have to celebrate until the next ride on the tariff merry-go-round begins.
CNN’s Jeff Zeleny and Paula Newton contributed to this report.