President Donald Trump is expected to announce new tariffs on automobiles, which may only affect “finished” vehicles and not auto parts. The announcement caused shares in the largest U.S. automakers to initially fall but they rallied after a report clarified the scope of the tariffs. Mexico, Japan, South Korea, the European Union, and Canada are the largest sources of U.S. auto imports. The announcement comes ahead of Trump’s planned “Liberation Day” on April 2, when he has promised to roll out tariffs against many trading partners. Trump had previously indicated he would exempt U.S. automakers from tariffs on Canada and Mexico, but his announcements have caused market uncertainty. Economic indicators show declining business and consumer confidence, with U.S. manufacturing activity slipping back into contraction territory. The Commerce Department reported a decline in orders for business equipment, while the services sector outlook deteriorated. Trump’s approach to tariffs has led to market volatility and uncertainty in the economy, despite some indicators showing the U.S. economy remains strong.
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