Donald Trump has never shied away from using tariffs to achieve policy objectives, imposing tariffs on $250 billion in Chinese goods last year and calling himself a “Tariff Man” in December in a tweet. However, after equity markets (SPY) fell sharply following that tweet, Trump somewhat toned down his rhetoric on trade issues. He has frequently spoken about how tariffs have impacted the Chinese economy and helped bring other countries to the negotiating table. This year, Alibaba (BABA), JD.com (JD), and NIO (NIO) had gained 29.0%, 24.02%, and 28.3%, respectively, as of February 22.
Section 232 probe
Last year, Trump imposed a 25% tariff on US steel imports following the US Department of Commerce’s Section 232 investigation. Earlier this month, the Department of Commerce submitted its Section 232 report on automotive imports.
While US steel companies welcomed the Section 232 probe into steel imports, US auto companies (TSLA) Ford (F) and General Motors (GM) weren’t thrilled by the probe. Several other US companies, including Apple (AAPL) and Amazon (AMZN), lobbied against the tariffs on China.
Trump has 90 days from the automotive report’s submission to act. Will he act as swiftly as he did with steel and aluminum tariffs? We’ll have to wait and see.