Shares up as Trump finds reverse gear for car tariff threat

US and European stock market values have surged on reports Donald Trump is to delay, by up to six months, a decision to impose tariffs on car imports to the US.

The US president faces a deadline of Saturday to confirm whether he will follow the new track for his protectionist agenda, an “America first” campaign that has resulted in an escalation in the trade war with China over the past week.

Values surged when CNBC, citing four sources, reported alongside others that a delay would be announced as the US stepped up trade talks with the European Union and Japan.

It was a moment of relief for investors who have fled risk, particularly in the technology and industrials sectors, this month following the apparent collapse of a looming trade deal with China.

Markets also took heart when US treasury secretary Steven Mnuchin confirmed he planned to travel to Beijing soon to continue negotiations.

US carmakers were among those to benefit on Thursday – with Ford and General Motors (GM) shares both gaining more than 1% as the S&P 500 built on tentative early gains.

GM
Image: GM is among US manufacturers to have openly called for talks, not tariffs

The tech-focused Nasdaq was 1.3% up in late deals.

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The FTSE 100 had earlier closed 0.8% higher – also lifted by the more positive noises on trade from Washington.

The prospect of tariffs on EU cars and car parts had been largely in the background as the China developments gathered momentum over the past week.

The idea of tariffs of up to 25% – as recommended by the commerce department on national security grounds – has faced stiff opposition in congress while GM has been among the domestic voices urging restraint.

Administration officials have said the tariff threat is a way to win concessions from Japan and the EU over their trade deficit but the industry has warned it could backfire, costing thousands of jobs in the US as import costs surge.

Brussels had said it would retaliate with measures of its own if the White House ordered the auto tariffs.

It has already targeted US whiskey and motorbikes in response to Trump tariffs on EU steel and aluminium.

Source: SKY NEWS

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