Stock surge after Trump grants one-month tariff delay for U.S. automakers
Stocks recorded significant gains Wednesday amid a volatile trading day that largely settled after President Donald Trump granted U.S. automakers a one-month reprieve on new 25% duties imposed on Canada and Mexico.
The S&P 500 closed up 1.1%, while the tech-heavy Nasdaq climbed 1.5%. The Dow Jones Industrial Average gained nearly 500 points, or 1.1%.
Earlier Wednesday, White House press secretary Karoline Leavitt said Trump had spoken with the Big 3 American automakers — Ford, GM and Stellantis (formerly Chrysler) — and granted them a one-month exemption on paying the 25% duties on autos produced in their Canadian or Mexican facilities.
Leavitt also said Trump was open to providing additional exemptions.
Earlier in the day, Trump had indicated Canada’s efforts to tackle drug and migrant flows continued to be insufficient to allow him to ease the tariffs entirely. In posts on his Truth Social platform, he said that after having spoken with Canadian Prime Minister Justin Trudeau, he had decided that the improvements Trudeau mentioned toward halting fentanyl and undocumented people from entering the United States were “not good enough” to lift the duties.
And in his address to Congress on Tuesday night, he indicated he would not relent on his tariffs scheme.
“We will take in trillions and trillions of dollars and create jobs like we have never seen before,” he told Congress in the first congressional speech of his second term.
Trump is set to speak with Mexico’s Claudia Sheinbaum on Thursday.
The uncertainty Trump’s approach has generated continues to shake markets. Even with Wednesday’s recovery, the S&P 500 is still down 3.6% over the past month, and it remains essentially flat on net since Trump won the election in November.
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Trump has acknowledged there could be difficulties along the way as he establishes his tariffs regime.
Shortly before markets opened, ADP reported that private-sector job creation slowed in February, with companies adding just 77,000 workers, far below the 186,000 jobs added in January and the 148,000 Dow Jones consensus estimate. Education and health services had some of the weakest job growth last month, while manufacturing, construction and leisure and hospitality showed strength, the data showed.
In his address to Congress, Trump told farmers that there “may be a little bit of an adjustment period” and that they “will probably have to bear with me again.”
“Tariffs are about making America rich again and making America great again. And it’s happening, and it will happen rather quickly,” he said. “There’ll be a little disturbance, but we’re OK with that. It won’t be much.”
Businesses including automakers, alcohol producers and major retailers, like Target, have warned that the added costs for companies to import goods from Canada and Mexico will have wide-ranging implications across the American economy and lead to higher prices for consumers.
Tariffs are paid by the U.S.-based company importing the goods into the country. Those companies can pass the added costs on to their customers in the form of higher prices, absorb the tariffs by cutting costs elsewhere or take a hit on profits.
Uncertainty around tariffs on Mexico and Canada has been looming for months after Trump first raised the threat shortly after his election. Last month, he said he would enact tariffs on the two countries on Feb. 4, only to announce he was delaying the move by a month the day before they set to be collected. This week, Trump said the countries hadn’t done enough over the past month to stop the flow of fentanyl, and the United States began collecting the tariffs Tuesday at midnight.
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This article was originally published on NBCNews.com