US stocks surged following reports that President Donald Trump may adopt a more measured approach to his proposed reciprocal tariffs set to take effect on April 2. Initially, the tariffs were slated to impact all nations trading with the US, but new media reports suggest that the focus may be narrowed to the "dirty 15" nations—those with the highest trade imbalances with the US. This shift in approach caused US stock markets to rally, with the Dow Jones Industrial Average rising by 1.42%, and the S&P 500 climbing over 2.27% on the day.
The reciprocal tariffs will match any tariffs currently imposed against US goods in a "tit-for-tat" manner. This comes on top of the 25% Section 232 tariffs on steel and aluminum imports, which went into effect on March 12. The announcement also mentioned that the tariffs on Canada and Mexico, originally planned for March 6, would be delayed until April 2 in compliance with the USMCA treaty.
Additionally, Trump indicated that secondary tariffs on Venezuela would be imposed on April 2, targeting countries that purchase oil or gas from Venezuela. These tariffs would be set at 25% and are part of his broader stance against the Venezuelan government.
In further developments, Trump also announced that additional tariffs on autos, lumber, and computer chips will be unveiled in the coming days, aimed at funding Republican tax and spending programs. This move was seen as a strategic effort to raise funds in line with promises made during his recent presidential campaign.
This news has shifted market sentiment, with investors reacting positively to the possibility of a more targeted tariff approach, signaling a potentially less aggressive trade policy than initially expected.
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