Dow recovered on Trump’s auto tariffs softening; Gold slips

·       Trump partially rolled back his auto tariffs amid heavy pressure from US automakers after a chaotic first 100 days of the White House circus

·       India's Phase One trade deal may be imminent in line with Trump's policy; India may provide significant concessions to the US, both on tariffs and non-tariff barriers

·       China and the US are also rolling back reciprocal tariffs on each other gradually and selectively, indicating active back-channel talks

·       US retail chains, small neighborhood groceries, and MSMEs are also urging Trump to bring down tariffs with a clear policy certainty by early May for coming festival season orders with exporters

Wall Street Futures gained for the last few days on signs of progress in US-China trade talks irrespective of whether Trump called Xi or vice-versa or any other telephonic calls happened at all. The US-China back-channel talks may be going on without intense media coverage for China’s domestic political compulsion and audience. The nationalistic Chinese public does not want to see their Supreme Comrade Xi cave at Trump’s gunpoint!

But Wall Street Futures were also undercut by China’s denial of any trade talks with the Trump admin. Trump’s suggestion of 50% tariffs as a "total victory" added uncertainty, while Beijing disputed claims of ongoing talks, offsetting optimism from China’s decision to exempt some US goods from tariffs.  But later, Trump’s call/comments for opening up of Chinese economy for more American goods as a ‘big win’ may be indicating active back-channel talks between the two largest economies in the world, controlling almost 45% of the global GDP. Overall, Wall Street surged for the week on the progress of US-China back-channel trade talks and fading concern of Fed independence- with the S&P 500 jumping 4%, the Nasdaq-100 soared 6%, and the Dow-30 gained 2%.

Major US retailers and almost all MSMEs are now anxious about Trump tariff uncertainty

On Monday, Wall Street closed almost flat amid confusing comments by Trump and his officials about the overall progress of trade deals with the top 18 US trade partners including China. Overall, US general/superstore shelves are getting empty due to the growing supply crunch. Also, all major US retailers need to get certainty about Trump’s tariff policy rather than a daily dose of dramatic bytes, Truths and chaos.

All major US retailers need to place festival season orders in huge volumes well in advance by May to various Chinese and other producers/exporters so that those goods can arrive in early October. But due to Trump tariff uncertainty and the 145% current tariff on China, acting as an embargo on cheaper Chinese goods, US importers are not in a position to place orders with China or even other exporters and also it’s not easy to find another reliable supplier, which can match China’s scale, efficiency and price. Thus major US retailers are now lobbying and urging the Trump admin for tariff & trade policy certainty rather than the present chaotic situation.

The US Treasury Secretary Bessent, less trade policy hawk is now basically in White House media management charge on Trump's tariff tantrum and providing multiple bytes/interviews in various TV channels to justify Trump’s chaotic policy.

Unsustainability of Current Tariffs: On April 28, Bessent emphasized that the high tariffs between the U.S. (145% on Chinese goods) and China (125% on U.S. goods) are unsustainable. He stated, "I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable," during an interview." He highlighted the need for China to take steps to reduce tensions, given the U.S.'s trade deficit position. Bessent said that China’s economy will not be sustained by exporting cheaper subsidized goods to the rest of the world, led by America and thus China must change its economic model.

U.S.-China Trade Talks: On April 28, Bessent indicated that the U.S. and China are engaging in discussions on key economic matters, despite public denials from Beijing. He suggested progress was being made, stating, “The Chinese will see this high tariff level is unsustainable for their business,” and expressed optimism about a potential resolution to the trade war threatening global economic stability.

Strategic Approach to Negotiations: Bessent underscored that the U.S. holds a stronger negotiating position due to China’s export-heavy trade surplus. He noted ongoing negotiations with other countries, such as India, which could lead to trade deals soon while urging China to come to the table to avoid further escalation.

These comments reflect Bessent’s broader stance that the current trade war trajectory is untenable, with a push for de-escalation through negotiations, particularly with China, while leveraging the U.S.’s consumption and reciprocal tariffs to secure favorable trade agreements globally. Like Trump, Bessent is also not able to provide any specific clarification about tariff negotiation progress with China or even the other leading 17 US trading partners.

On Tuesday, Secretary Bessent reiterated the US has placed China on hold for the time being while negotiating trade accords with 15 to 17 other countries. He also stated that it is up to Beijing to take the initial step towards de-escalating the tariff dispute. Oil prices stabilized after a decline amid concerns of economic hardship in the US.

·       We want long-term tariff revenue and deals

·       We will speak to at least 17 partners over the next few weeks

·       There is a good chance we'll see income tax relief in tax bill

·       Tariff income could be used for tax relief

·       The onus will be on China

·       Tariffs will make China lose jobs

·       Trump creating strategic uncertainty in negotiations

·       Trump creating strategic uncertainty in negotiations

·       Bessent on China talks: I won't comment on who's talking to whom

·       The aperture of uncertainty will be narrowing

·       Announcing trade deals will bring certainty

·       Trump has met with domestic and foreign auto producers.

·       We want to give automakers a pass to create jobs

·       I don't anticipate supply chain shocks

·       Asia trading partners have been the most forthcoming

·       I think Vance and Modi made good progress

·       We could see some Indian announcements

·       We had substantial talks with Japan

·       We could see some South Korea deal contours coming together

·       Governments want to have a framework of a trade deal before going into elections

·       India is easier to negotiate with than other countries

·       Deregulation will kick in during the third and fourth quarters

·       The tax bill is moving forward

·       Individual investors trust Trump rather than institutions

·       We won't detail auto tariff relief

·       Auto relief would go toward reshoring manufacturing

·       We want precision manufacturing

·       We want to see internet tax in the EU removed

·       The full expensing of equipment purchases, in factories will be retroactive to January 20

·       U.S. 'very close' to a trade deal with India

·       No trade deal is done until Trump announces it

·       Trump needs to sign off on 18 key trade deals. He's involved in talks

·       There is a plan for changes to auto tariffs

·       Trump wants to make the US the best destination for auto manufacturing, and the tax deal will make auto loans for US-made cars deductible.

·       Bessent repeats that tariffs are unsustainable on China's side

·       Factories in China are having to shut down, and have seen substantial estimates of layoffs in China

·       We will have to take into account China's failure to keep commitments in Trump's first-term 'Phase 1’ trade agreement

·       I am hoping for a signed, sealed, and delivered tax bill by July 4

·       We are analyzing the 15% made-in-America tax bracket for companies

·       Main Street investors hold on tight out of trust in President Trump

·       Trading partners' actions will influence decision

·       Have not set a new x date yet

·       X date will come by the end of this week or next week

·       We want long-term tariff revenue and deals

·       We will speak to at least 17 partners over the next few weeks

·       There is a good chance we'll see income tax relief in tax bill

·       Tariff income could be used for tax relief

·       Over time will see that Chinese tariffs are not sustainable for China

·       Tariffs are unsustainable for China

·       The onus will be on China

·       Tariffs will make China lose jobs

·       Trump creating strategic uncertainty in negotiations

Trade & Tariff Headlines from China

·       China has waived a 125% tariff on US ethane imports imposed earlier this month, according to two sources familiar with the matter.

·       The move will relieve pressure on Chinese firms that import US ethane for petrochemical production while also providing a market for natural gas liquid, a byproduct of US shale gas production.

·       China's FM says concession and retreat will only make the bully more aggressive.

·       China MOFCOM Issues Statement on Boeing Planes Delivery

·       China comments on report of China stopping to take Boeing planes

·       The Chinese company, Boeing affected by US tariffs

·       China willing to support cooperation between China, US companies

·       China urges the US to establish a stable business environment

·       China to provide regular trade opportunities to US companies: Ministry of Commerce

·       China Vice Premier He Lifeng: We need to calmly analyze and respond to recent developments and changes in the external situation

Trump’s first 100 days of chaotic policy moves from tariffs to education & immigration

U.S. President Trump also made several comments on tariffs, trade, and China in the last few days, emphasizing progress with China in trade deal talks to stabilize Wall Street. Trump claimed negotiations with China were underway, stating in a TIME magazine interview that Chinese President Xi Jinping had called him. He did not specify when the call occurred or the details discussed but emphasized, “He’s called. And I don’t think that’s a sign of weakness on his behalf.”

Trump also asserted that the U.S. was “meeting with China” and “doing fine with everybody,” suggesting progress in trade talks. However, China’s Foreign Ministry denied any such consultations or negotiations, stating, “The U.S. should stop creating confusion.” Trump further told reporters on Air Force One that it would be a “win” if China opened its markets to U.S. goods, and he considered tariffs of 20% to 50% a year later a “total victory.” He also claimed to have made “200 deals” to be completed in three to four weeks, though specifics were not provided.

Overall it seems that Trump is trying to maintain an optimistic yet firm stance on trade with China. But Treasury Secretary Bessent’s remarks that the 145% tariffs on Chinese goods were unsustainable, implying Trump’s awareness of the need for de-escalation. Trump’s comments portray a mix of confidence in ongoing negotiations, a hardline stance on tariffs as leverage, and a belief in securing favorable trade deals, despite China’s public denials of talks. Trump may be relying on known policy dove or relatively less hawk Bessent, to signal potential de-escalation while maintaining pressure on China.

Trump’s strategy of disruptive tariff policy may be pushing the US economy towards stagflation even before the full implementation of his bellicose tariff policies as the US economy may be now facing an imminent supply shock, which may cause higher prices.

Trump’s approval rating, averaging 39–45% across polls, is lower than any modern president at this stage, including his first term (42–45%). The chaotic rollout of tariffs, economic disruption, and perceptions of overreach (e.g., 62% believe judges are enforcing legal limits, not interfering) have eroded his early momentum. While his base remains loyal, the loss of independents and swing voters signals political risk as the midterm election approaches.

On Tuesday, April 29, 2025, Trump reportedly called Amazon CEO Bezos right after he was informed about a media report claiming that the retail giant would potentially display both the actual prices of its products and the ones after tariffs. Trump called Bezos to complain about such potential actions. Ever since Trump took office, Bezos has been visiting the West Wing when he stays in Washington. Following the release of the report, the White House called the move "hostile and political." Shortly after, Amazon came out with a statement, denying the news.

Trump scaled back his auto tariffs narrative after 100 days of circus in the White House.

In an early US session Tuesday, Wall Street Futures stumbled briefly after a report that Trump may sign an executive order on auto tariffs. But soon stocks recovered after another WSJ report that Trump may again blink on his auto tariffs narrative including that on automobile parts with retroactive effect. This means that automakers are to be reimbursed for such tariffs already paid. The decision would also change the administration's tariffs on foreign auto parts, allowing automakers to be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a US-made car for one year. This reimbursement would then drop to 2.75% of the vehicle's value in a second year before being "phased out altogether. The US automakers are already under higher manufacturing costs on Trump’s metal (steel & aluminum) tariffs.

President Trump signed executive orders on April 29, 2025, to ease some of the 25% tariffs on automobiles and auto parts, a move seen as a partial reversal following intense lobbying from automakers. These orders provide relief by preventing the stacking of multiple tariffs, such as those on steel and aluminum, and offer a 15% rebate for vehicles finished in the U.S. in 2025, with a 10% rebate in 2026. The changes aim to encourage automakers to shift production to the U.S. while addressing concerns about rising car prices and supply chain disruptions.

U.S. auto tariff has not been uniformly reduced to 10% from 25%. As of April 29, 2025, President Trump's executive orders provide targeted relief on the 25% tariffs on automobiles and auto parts. Specifically, the orders include a 15% rebate for vehicles finished in the U.S. in 2025 and a 10% rebate in 2026, while preventing the stacking of multiple tariffs (e.g., on steel and aluminum). The base 25% tariff rate on imported autos and parts remains in place, with these measures effectively lowering the cost for some manufacturers rather than reducing the tariff rate itself.

However, industry leaders, particularly in Canada, argue the relief is insufficient, and analysts expect car prices to rise regardless, with estimates suggesting an average increase of $3,600-$6,000 per vehicle. This follows earlier indications of Trump softening his stance, such as reducing proposed China tariffs from 145% to a lower, unspecified rate. Trump critics view this as a pattern of backpedaling under pressure, while supporters frame it as pragmatic flexibility to protect U.S. industry.

The US Commerce Secretary Lutnick said:

·       This is ’finish your cars in America', and you win

·       I have discussed specific plans with auto-makers. I am leaving it to them to announce

·       Domestic manufacturers estimate they still have 15% non-domestic supply chains, and expect that to go down to 10% next year

·       Auto manufacturers will pick the highest tariff that comes with their goods and they will only pay one

·       It is not a rebate; it is an offset that comes from tariffs already being paid. It will not cost the government any money whatsoever

·       25% will stack on top of the MFN rate

·       The parts offset are available only to finished producers making and selling the car.

·       The offset amount will be applied at the April 3rd start date of tariffs, and based on production thereafter.

·       USMCA Parts will not carry tariffs, there's no change in that approach

·       It wasn't clear until conversations with auto-makers that even a small amount of tariffs would hold them back from hiring and investment

·       Automakers told Trump they needed relief to boost hiring plans

·       There is no third year of relief

·       Two years was the agreed time to give manufacturers sufficient time to build up the supply chain

·       Highly automated auto plants are the future of US labor

·       A 10% tariff is virtually not going to change prices

·       I have a trade deal pending approval. One trade deal is reached with a country I will not name. I am awaiting approval from the other country before announcing

·       Tim Cook wants to build iPhone in the US, he needs robots

·       Markets are getting the tariff impact wrong

·       Wall Street is wrong about Trump's tariffs because it does not see the big picture.

·       The purpose of trade deals is to drive US exports

·       Trump is not focused on the markets

·       I have a deal with a country, I'm just waiting for the foreign parliament to approve.

·       Treasury Secretary Bessent is in charge of the China trade deal; I am in charge of 17 other top US trading partners.

Trump’s anti-Canada rhetoric helped Carney for the slim election victory amid an anti-US Canadian nationalistic wave after the mess created by previous PM Trudeau and the economic slowdown. Canada's PM Carney's Liberals will form a Minority Government.

On Tuesday, Trump said in his Truth posts and regular media bytes:

·       “Good luck to the Great people of Canada. Elect the man who has the strength and wisdom to cut your taxes in half, increase your military power, for free, to the highest level in the World, have your Car, Steel, Aluminum, Lumber, Energy, and all other businesses, QUADRUPLE in size, WITH ZERO TARIFFS OR TAXES, if Canada becomes the cherished 51st. State of the United States of America. No more artificially drawn lines from many years ago. Look how beautiful this land mass would be. Free access with NO BORDER. ALL POSITIVES WITH NO NEGATIVES. IT WAS MEANT TO BE! America can no longer subsidize Canada with the Hundreds of Billions of Dollars a year that we have been spending in the past. It makes no sense unless Canada is a State!”

·       “The USA lost Billions of Dollars A DAY in International Trade under Sleepy Joe Biden. I have now stemmed that tide and will be making a fortune, very soon. Stay tuned as we MAKE AMERICA GREAT AGAIN!!!”

·       If automakers can't get parts we don't want to penalize them

·       I will focus on the economy in my speech in Michigan. (Tonight at 16:10 ET)

·       We're going to be reducing people’s taxes

·       I will be talking to the PM of Australia about trade

·       I am not at all worried about the auto industry

·       India is coming along great, I think we have a deal on tariffs

·       Trump has said he would veto the bipartisan senate resolution that would end the April 2nd Trump tariffs measure if it passes Congress

·       Trump signs executive order on autos

·       China will probably eat those tariffs

·       Trump reiterates China and the EU ripped the US off

·       Defense Secretary Hegseth is doing a good job (amid exit speculation after Signal chat fiasco)

·       I will blame Democrats if the tax cut is not approved in Congress

·       Trump signs order easing some auto tariffs

·       We Need To Reclaim Our Country's Soul From The Radical Left

·       I think we'll have a deal with India on tariffs and trade

·       World experiencing revolution in common sense

·       We prefer low interest rates

·       Politicians destroyed Detroit to develop Beijing

·       judges attempting to deprive executive authority

·       Hope Supreme Court Will Save This

·       Nothing will hinder my mission to ensure the safety of America

·       Media trying to claim prices have increased

·       Fed officials not doing a good job

·       Federal Reserve Chairman is not doing a good job

·       I am more knowledgeable than the Federal Reserve Chair

·       Prices Increase: Fake News Misleading Readers

·       Fed Chair Not Meant to Criticize

·       Judges Trying to Strip Presidential Authority

·       Nothing will impede my mission to ensure the safety of America

·       I know more than the Federal Reserve Chair

·       I want to be courteous and considerate to the Federal Reserve

·       No criticism of Federal Reserve Chair

·       Federal Reserve keeps interest rates steady

·       India, France, China officials to make a deal

·       Trade negotiations, should they prolong, will simply establish a price

·       Aluminum Steel Tariffs Protect National Foundation

·       If trade discussions take too long, will just set the price

·       I know more than the Federal Reserve Chair

·       China Tariffs End Job Thefts

·       We're going to make a fair deal with China on trade

·       China wants to make a deal, we want to make a deal

·       Canada and Mexico take a significant volume of business

·       Tariffs Have Not Yet Really Started

·       Canada and Mexico have taken a significant amount of business

·       Going to make a fair deal with China on trade

·       Preference for Main Street over Wall Street

·       China seeks a deal, we seek a deal

·       We cooperate with China

·       Tariffs have not started yet

·       Main Street preferred to Wall Street

·       Praises Investments from Nvidia, TSMC, Amazon

·       Apple Great Company

·       Elon produces excellent vehicles but not everyone desires one

·       Elon Musk a great guy, has helped us

·       Elon Musk Paid Big Price to Assist

·       Imposing tariffs on China, Canada, Mexico over fentanyl

·       The tax bill will be the largest ever passed in US history

·       Vows no reductions for Medicare and Social Security

·       House GOP working to increase investments in Medicaid

·       Desires to protect Medicaid for the most vulnerable

·       Defend Medicaid for those in need

·       Putin wants peace

·       Ukraine 'Will Be Crushed Very Shortly' Without Peace Deal

On Tuesday, the US CEA Miran said:

·       Hopefully, we'll start hearing about deals that are done in the coming days to weeks

·       I expect that we will move towards a form of de-escalation. It'll come sometime shortly

·       We don't see higher consumer prices over an extended time

·       Other countries will bear the burden in the fullness of time

Canadian PM Carney said:

·       I will sit down with Trump to discuss future economic and security ties between the two sovereign nations

·       We will win the trade war and build the strongest G-7 economy

·       Canada's PM Carney Speaks with Trump - Canadian Government

·       Trump and I agree to meet in person

·       Trump agreed to meet in person shortly

·       Trump agreed to work together as sovereign states

Indian Govt:

·       Indian, US officials meet in Washington, trade talks make positive progress

·       India is prepared to offer the US the "forward most favored nation" clause

·       India is prepared to offer the US the 'Forward Most-Favored-Nation' clause as a sweetener in trade talks

Mexico said:

·       Mexico's Deputy Foreign Trade Minister will meet with USTR officials this week to reiterate Mexico's commitment to the protection of intellectual property (IP)

·       USTR report on intellectual property does not involve trade measures that could affect Mexico

·       USMCA grants Mexico until July 1st, 2025, to implement intellectual property protection policies for pharmaceutical products

Market Impact

Despite China’s public denial of any trade talks with the US, both China and the US are gradually softening reciprocal tariffs on each other. This indicates some progress on US-China back-channel trade talks coupled with Trump’s latest dialing back of auto tariffs boosted Wall Street Tuesday; Gold slips.

Weekly-Technical trading levels: DJ-30, NQ-100, and Gold

Looking ahead, whatever the fundamental narrative, technically Dow Future (CMP: 40250) now has to sustain over 41200 for a further rally towards 41500/42000-42300-43300/44600, and even 45200 in the coming days; otherwise sustaining below 41100/40700,-40000 DJ-30 may again fall to 39700/38600-38000/37700-37300/37000 in the coming days.

Similarly, NQ-100 Future (19500) has to sustain over 19700 for a further rally to 20000/20550-20900/21400 and even 22000-22400 in the coming days; otherwise, sustaining below 19650, NQ-100 may again fall to 19100/18800-18600/18000-17600/16400 and 16200-15800 in the coming days.

Also, technically Gold (CMP: 3317) has to sustain over 3335-3370 for a further rally to 3400/3425-3450/3505*, and even 3525/3555 in the coming days; otherwise sustaining below 3325, Gold may again fall to 3300/3275-3255/3200, Gold may further fall to 3180/3130-3065/2990 and 2960/2900*-2800/2750 in the coming days.