Trump blinks on auto tariffs
The auto tariffs that the president froze for a month on Wednesday, a day after imposing blanket 25% tariffs on Canada and Mexico, shows how he sometimes has second thoughts about his own aggression.
Perhaps his favorite barometer, the stock market, forced his hand. His concession reversed two days of steep losses on the Dow Jones Industrial Average with a handy near-500-point rebound.
CNN reported Wednesday that Trump relented after conversations with the CEOs of the Big Three automakers. And his press secretary Karoline Leavitt said he was open to “hearing about additional exemptions.”
The idea that well-placed CEOs can use their access to the powerful to acquire exemptions and special favors not available to ordinary Americans is the antithesis of an equitable economy. But then Trump has shown little respect for rules-based systems that eliminate the kind of patronage and potential for corruption that thrives in autocratic societies.
Trump’s approach may also mean he likes threatening tariffs more than imposing them. But by constantly threatening tariffs and then creating doubt about whether or when they will be maintained, the president is causing huge uncertainty for businesses that need to establish certainty of costs and supply and consumers who could damage an already-softening economy if they rein in spending.
“There’s so much uncertainty about what the administration is doing that the mere prospect of tariffs is creating a big anchor on the economy,” Bharat Ramamurti, former deputy director of Biden’s National Economic Council, told reporters on a conference call Monday. “The prospect of significant tariffs on our allies has resulted in withholding investments and preemptive price increases that are going to be borne by small businesses and, ultimately, by consumers.”
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