Another U-Turn: Trump reverses tariffs that caused market meltdown, but companies remain bewildered

WASHINGTON AP President Donald Trump delivered another jarring reversal in American contract framework Wednesday suspending for days import taxes he d imposed barely hours earlier on dozens of countries while escalating his arrangement war with China The moves triggered a powerful stock domain rally on Wall Street but left businesses investors and America s trading partners bewildered about what the president is attempting to achieve The U-turn came after the sweeping global tariffs Trump revealed last week set off a four-day rout in global financial markets paralyzed businesses and raised fears the U S and world economies would tumble into recession White House press secretary Karoline Leavitt tried to characterize the sudden change in program as part of a grand negotiating strategy But to those outside the Trump administration it looked like a cave-in to area pressure and to growing fears that the president s impetuous use of import taxes tariffs would cause massive collateral economic damage Other countries will welcome the -day stay of execution if it lasts but the whiplash from constant zig-zags creates more of the uncertainty that businesses and governments hate declared Daniel Russel vice president at the Asia Society Approach Institute The Administration s blunt-force tactics have rattled allies who see the sudden reversal as damage control following the arena meltdown rather than a pivot to respectful balanced negotiations Trump s turnaround Wednesday capped a wild week in U S business strategy On Wednesday April which Trump labeled Liberation Day the president released plans to impose tariffs on almost every country on earth upending the world trading system The first of his new tariffs a baseline tax on imports from largest part countries went into effect Saturday At midnight Wednesday he upped the ante by slapping what he called reciprocal taxes on countries he accused of unfair trading practices and adding to U S bargain deficits Those are the tariffs he suspended for days saying the pause would give countries time to negotiate with him and his commerce organization There was one exception to the reprieve He raised the tariff on Chinese imports to a staggering punishing Beijing for announcing retaliatory tariffs on the United States Meanwhile the baseline tariffs a substantial act of protectionism in their own right remain in place Companies cut back delay plans Trump s ever-changing exchange war tactics which include earlier levies on cars steel and aluminum and Mexico and Canada have already done damage forcing dazed companies to delay or cancel plans as they tried to figure out what Trump was doing and how they should respond Selected companies temporarily laid off workers after Trump s widespread tariffs were released while there were signs that a multitude of firms held off on hiring amid the widespread uncertainty the tariffs created Carmaker Stellantis temporarily cut jobs at factories in Michigan and Indiana after production was halted at two plants in Canada and Mexico in the wake of Trump s duties on imported cars And Cleveland-Cliffs laid off workers at a factory in Michigan and an iron ore mine in Minnesota in response to a drop in demand from auto companies Cleveland-Cliffs mentioned it would resume production at the two facilities once auto production returned to the U S Minutes from the Federal Reserve s March - meeting published Wednesday revealed that a large number of of its policymakers reported that their business contacts stated pausing hiring decisions because of elevated protocol uncertainty And Delta Air Lines announced earlier Wednesday that demand for domestic leisure trips and corporate voyage has stalled because of the uncertainty around global commerce In a conference call with investors the company mentioned it was cutting ceiling It also declined to provide a full-year financial forecast Right now it s hard to know how this is going to play out given that this is somewhat self-imposed Delta CEO Ed Bastian revealed I m hopeful that sanity will prevail and we ll move through this period of time on the global deal front relatively speedily Desperately seeking clarity on Trump s tariffs Businesses have sought greater clarity around Trump s ultimate tariff policies for weeks It s not clear that the -day pause has reduced their uncertainty Jeff Jaisli CEO of the New Jersey-based importer exporter Jagro reported Trump s Truth Social post on Wednesday had made things even worse and more confusing He was trying to figure out which tariffs applied to which countries We re scrambling to find correct information and procedures for entries we re processing NOW in real time he stated by email He could find no guidance on the websites of the White House or the Customs and Frontier Protection agency which collects tariffs Earlier Jaisli called Trump s tariffs a grenade that was thrown into the room that s going to cause chaos Trump s agreement war with China escalates Trump s tariffs have set off a tit-for-tat business war with China the world s second-biggest market system Even before Trump upped his taxes on China to the Chinese had set their own tariffs on the United States at The World Deal Organization s director-general Ngozi Okonjo-Iweala warned that the rising tension could reduce U S -China merchandise agreement by and severely damage the global economic outlook Of particular concern is the probable fragmentation of global bargain along geopolitical lines she wrote in a report late Wednesday A division of the global financial market into two blocs could lead to a long-term reduction in global real GDP by nearly Citing WTO projections she warned the negative effects could ripple through to other economies especially advancing ones She urged countries to ensure an open global trading system and resolve differences through cooperation Meanwhile U S companies struggled to figure out how to respond to huge levies on Chinese products they d come to rely on Jessica Bettencourt is CEO of Klem s a third-generation store in Spencer Massachusetts that sells everything from lawn and garden items to workwear and gifts She revealed that the escalation of tariffs from China have made her stop ordering any new fourth-quarter product that is holiday gifts or toys She is also reconsidering any fall apparel and footwear orders that aren t already placed The worst thing is uncertainty and we have massive uncertainty commented Jason Goldberg chief commerce strategy officer at Publicis Groupe a global marketing and communications company No one can make any moves Everybody is trying to save as much cash and defer any unnecessary expense People are getting laid off Orders are getting cancelled Expansion plans are being put on hold