The Trump administration continues to flip-flop on tariff policy, casting a cloud of constant macroeconomic uncertainty over markets.
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Commerce Secretary Howard Lutnick walked back the recent reciprocal tariff exemption on select electronics announced in an April 12 bulletin from the United States Customs and Border Protection.
On April 13, Lutnick told ABC News that the reciprocal tariff exemption was temporary until the administration established a sector tariff regime for semiconductor products, which includes phones, graphics processors, and computing chips in a “month or two.” Lutnick added:
“President Trump has called out pharmaceuticals, semiconductors, and autos. He called them sector tariffs, and those are not available for negotiation. They are just going to be part of making sure we ensure core national security items are made in this country.”
“We can’t be relying on China for fundamental things we need. Our medicines and our semiconductors need to be built in America,” Lutnick continued. The official also said he was confident that the US and China would arrive at a trade deal through negotiations.
The emphasis on national security and onshoring critical industries could signal that the trade tariffs will be a long-term geostrategic policy and not simply a short-term negotiation tactic to make US exports more attractive, as some analysts have suggested.
The Volatility S&P Index (VIX), a measure of the S&P stock index’s volatility, remains elevated amid macroeconomic uncertainty. Source: TradingView
Related: Bitcoin ‘decouples,’ stocks lose $3.5T amid Trump tariff war and Fed warning of ‘higher inflation’
Trade war heightens volatility and sends markets tumbling
Trump’s trade tariffs crashed the stock and crypto markets, wiping away trillions in shareholder value as investors dumped riskier assets on fears of a lengthy trade war between the United States and its trading partners.
In an April 10 X Post, Bloomberg analyst Eric Balchunas cited the SPY US Equity History Volume chart as evidence that the S&P 500 stock market index is now more volatile than Bitcoin (BTC).
According to the analyst, the S&P 500 Index hit a volatility level of 74 in April, compared to Bitcoin’s 71.
Stocks and crypto pumped following rumors of the Trump administration initiating a 90-day reciprocal tariff pause. Approximately $2 trillion was pumped into stocks on rumors of softer trade policies.
Much of this value was then wiped away when Trump claimed that rumors of a 90-day pause were false and returned once the Trump administration did, in fact, issue a reciprocal tariff pause in the following days.
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