President Donald Trump has suggested that the tariffs due to be implemented in April may be less severe than initially expected, allaying investor concerns.
What Happened: Trump indicated that the tariffs, scheduled to take effect on April 2, will likely be more “lenient than reciprocal.” He made these remarks during a Newsmax interview with Greg Kelly on Tuesday. Trump said, “I’ll probably be more lenient than reciprocal because if I was reciprocal, that would be very tough for people.” He recognized the presence of some exceptions but stressed that they would be minimal.
“No, I don’t want to have too many exceptions. Look, we’ve been ripped off for 45 years by other countries,” Trump told Kelly.
This announcement comes amid investor fears that a more stringent approach from the Trump administration could adversely affect consumer and corporate sentiment, potentially slowing the U.S. economy. The S&P 500 has experienced a 3% decline in the past month, partially due to tariff pressures.
Why It Matters: The market rally on Monday was reportedly driven by investor optimism for a new approach to tariffs, according to CNBC's Jim Cramer. He attributed the market rebound to the potential for a more transparent future in global trade, suggesting that the key factor was the possibility of a plan that would allow foreign nations or companies to offset tariffs.
However, the first quarter of 2025 saw a significant drop in economic optimism among chief financial officers, with the latest CFO Survey pointing to tariffs and market uncertainty as primary drivers. This survey, conducted by Duke University and the Federal Reserve Banks of Richmond and Atlanta, provides insights from financial decision-makers.
Notably, while stocks recovered since Monday after a correction following hints of potential tariff reductions, Trump also announced forthcoming tariffs on pharmaceuticals and automobiles, along with additional tariffs on buyers of Venezuelan oil and gas.
On Tuesday, the S&P 500 edged 0.16% higher to close at 5,776.65, while the Nasdaq Composite rose 0.46% to end at 18,271.86.
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