Trump suggests he may pause 25% auto tariffs amid market concerns
Trade war with China escalates amid new tarrifs
China announced Friday that it will raise tariffs on U.S. goods from 84% to 125% — the latest salvo in an escalating trade war between the world’s two largest economies that has rattled markets and raised fears of a global slowdown. While U.S. President Donald Trump paused import taxes this week for other countries, he raised tariffs on China and they now total 145%. China has denounced the policy as "economic bullying" and promised countermeasures. The new tariffs began Saturday. LiveNOW from FOX host Stephanie Coueignoux spoke to Sandra Swirski, economy expert on the latest.
WASHINGTON - President Donald Trump said Monday he’s considering a temporary exemption for the auto industry from his recently imposed 25% tariffs—signaling yet another potential reversal in his trade war strategy as financial markets and global leaders react with concern.
"They need a little bit of time," Trump said from the Oval Office, referring to carmakers shifting production from overseas. "They’re going to make them here, but they need a little bit of time." The exemption, if enacted, would give automakers more breathing room as they adjust complex supply chains that run through Canada, Mexico, and Asia.
Why are Trump’s tariffs causing economic jitters?
Big picture view:
Trump’s trade policies—once touted as "permanent"—have become increasingly fluid. Since the March 27 announcement of the auto tariffs, he has walked back or modified several parts of his tariff plan.
Last week, after a bond market sell-off raised interest rates, Trump lowered baseline tariffs across dozens of countries to 10% for 90 days, while simultaneously hiking import taxes on China to 145%. Electronics, however, were temporarily spared, taxed at just 20%.
"I don’t change my mind, but I’m flexible," Trump said Monday.
That flexibility has created significant volatility in the global economy. Wall Street’s S&P 500 index saw a slight bump Monday, but remains down nearly 9% on the year. U.S. 10-year Treasury yields rose to around 4.4%, and analysts say continued uncertainty could deepen market unease.
What are experts saying?
What they're saying:
Carl Tannenbaum, chief economist for Northern Trust, described the president’s trade tactics as economic "whiplash," warning he might have to "get fitted for a neck brace." He added that the damage to consumer and market confidence may already be irreversible.
US President Donald Trump speaks during a meeting with El Salvador's President Nayib Bukele in the Oval Office of the White House in Washington, DC, April 14, 2025. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
Economists say sudden shifts in policy—especially ones involving tariffs—make it difficult for businesses to plan ahead and contribute to fears of a possible recession.
What’s the global response?
The other side:
While Trump insists the tariffs have strengthened America’s hand in trade talks, other world leaders are working around them. Chinese President Xi Jinping met with Vietnam’s Communist Party chief in Hanoi on Monday, pushing for closer Asian cooperation. The meeting is seen as a counter-move to U.S. tariff pressure.
Trump downplayed the significance of the summit but accused both nations of plotting to harm the U.S. economy. "They’re trying to figure out how do we screw the United States of America," he told reporters.
Trump also mentioned recent conversations with Apple CEO Tim Cook, saying he "helped" the company amid rising costs for products assembled in China. The administration has repeatedly used Apple as an example of how tariffs can be adjusted to benefit specific U.S. companies—though the exact nature of that help remains unclear.
The Source: This report is based on statements made by President Donald Trump in the Oval Office on April 14, 2025, and additional reporting by the Associated Press. This story was reported from Los Angeles.