The Trump tariff situation remains unclear ahead of “Liberation Day”

President Trump indicated yesterday that he might soften upcoming reciprocal tariffs against US trading partners, and also announced new levies on countries that buy oil or gas from Venezuela, marking the latest recalibration of his administration’s tariff plans.

Catch up quick: Trump has repeatedly called April 2 "Liberation Day," in reference to new wide-ranging reciprocal tariffs scheduled to take effect a week from tomorrow.

• The President has previously said the reciprocal tariffs would involve responding to any duties on US exports by enacting identical duties on the other country (involving the same products and same rates).
• But he appeared to soften that stance yesterday, saying the reciprocal tariffs could stop short of equalizing US duties with other countries, and that some nations could be exempt.
• Trump also announced a 25% tariff on countries purchasing oil or gas from Venezuela over the flow of migrants from the country to the US. The move would result in an effective 45% US tariff on imports from China, a top destination for Venezuela’s crude oil exports.

Riding the tariff seesaw

Many business leaders have struggled with making sound investment decisions in the face of the Trump admin’s on-again, off-again trade war. Perhaps the biggest question for companies is whether the tariffs are short-term, or here for the long haul.

• The Trump administration says tariffs are a temporary tool meant for achieving narrow policy aims, like reducing fentanyl and illegal immigration from Canada and Mexico.
• But Trump also says tariffs are part of a long-term rewiring of the global economy to favor more US manufacturing, as well as a potential major driver of federal revenue – both of which imply they’ll remain in place indefinitely.

Markets have seesaw’d, too. Major US stock indices closed up sharply yesterday following multiple reports that said the Trump admin is planning lesser, targeted tariffs for April 2 (S&P: +1.8%; Dow: +1.4%; Nasdaq: +2.3%). More broadly, stocks rose last week to snap a month-long losing streak partly driven by uncertainty surrounding US tariff policies.