Donald Trump considers pausing motor tariffs as world economy suffers whiplash

Donald Trump (AP)

Donald Trump has suggested that he might temporarily exempt the motor industry from tariffs he previously imposed on the sector, to give car makers time to adjust their supply chains.

“I’m looking at something to help some of the car companies with it,” the US president told reporters in the Oval Office.

He said car makers need time to relocate production from Canada, Mexico and other places, “and they need a little bit of time because they’re going to make them here, but they need a little bit of time. So I’m talking about things like that”.

The statement hinted at yet another round of reversals on tariffs as Mr Trump’s onslaught of import taxes has panicked financial markets and raised deep concerns from Wall Street economists about a possible recession.

I don’t change my mind, but I’m flexible

When he announced the 25% motor tariffs on March 27, he described them as “permanent”. His hard lines on trade have become increasingly blurred as he has sought to limit the possible economic and political damage from his policies.

Last week, after a bond market sell-off pushed up interest rates on US debt, Mr Trump announced that for 90 days his broader tariffs against dozens of countries would instead be set at a baseline 10% to give time for negotiations.

At the same time, he increased the import taxes on China to 145%, only to temporarily exempt electronics from some of those tariffs by having those goods charged at a 20% rate.

“I don’t change my mind, but I’m flexible,” Mr Trump said on Monday.

His flexibility has fuelled a sense of uncertainty and confusion about his intentions and end goals.

Carl Tannenbaum, chief economist for the Northern Trust global financial firm, warned in an analysis: “Damage to consumer, business and market confidence may already be irreversible.”

The president also said that he had spoken with Apple chief executive Tim Cook and “helped” him recently. Many Apple products, including its popular iPhone, are assembled in China.

The Trump administration has suggested that its tariffs had isolated China as the US engaged in talks with other countries, but Beijing is also seeking to build tighter relationships in Asia with nations stung by Mr Trump’s tariffs.