President Donald Trump said Tuesday there would be “a little disturbance” from his budding trade war but insisted it wouldn’t be a big deal.
“There will be a little disturbance, but we’re OK with that,” Trump said during his address to a joint session of Congress. “It won’t be much.”
Investors might beg to differ as the gains from the postelection “Trump bump” disappear amid the tariff news.
Stock markets dropped sharply on Tuesday as the Trump administration implemented new 25% levies against goods from Canada and Mexico. The Dow Jones Industrial Average fell 1.6% and ended the day down on the year.
Automakers were among those that declined amid fears Trump’s tariffs would disrupt North American supply chains. Many U.S.-sold cars are assembled in Canada and Mexico, while auto components move back and forth over the borders before they make it into vehicles.
Trump often calls “tariff” the “most beautiful word,” and he devoted a good bit of time to it on Tuesday.
“Tariffs are about making America rich again and making America great again, and it’s happening, and it will happen rather quickly,” he said.
He also claimed that the U.S. automakers were “excited” about his new tariffs — even though companies like Ford have warned they could raise auto prices significantly and create new headaches for the industry.
“Spoke to the majors today, all three. The top people,” Trump said at one point, seemingly alluding to the Big 3 U.S. automakers. “And they’re so excited.”
If Trump did speak to the top brass at Ford, General Motors and Jeep parent company Stellantis, it’s unlikely they expressed glee over the new tariffs.
Stellantis has argued that the tariffs against Mexico and Canada would be a boon to Asian and European brands.
“Because the industry is highly integrated across North America, these tariffs will put Stellantis’ flagship Chrysler, Dodge, Jeep, and Ram brands at a competitive disadvantage versus Korean, Japanese and European importers,” the company told its dealers in an email quoted by Reuters.
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Ford CEO Jim Farley didn’t sound too excited when he discussed the tariffs last month at an investor conference.
“Let’s be real honest: Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen,” Farley said.