Market whiplash on tariffs this week shows the limits of listening to anyone but Trump

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  • Mar 07, 2025

A series of rapid-fire tariff developments this week left markets on edge in part because of sharp shifts from Trump but also conflicting signals from his top advisers about what the president planned to do.

Trump’s team offered a variety of scenarios throughout the week of what to expect, only to see Trump himself sometimes diverge on key decisions and details.

Commerce Secretary Howard Lutnick was particularly prominent with at least seven television appearances in recent days.

"I think markets need to be aware that no one can reliably speak for Trump given how much decision-making has been centralized in the president personally," said Tobin Marcus, the head of US policy and politics at Wolfe Research.

The confusion was in evidence all week and also moved in unpredictable directions.

Early in the week, as Trump was considering whether to let the tariffs kick in, Lutnick sent signals that they could be tempered before implementation.

Read more: What Trump's tariffs mean for the economy and your wallet

But then, after the duties came in at full force, Lutnick described Trump’s approach as looking to meet Canada and Mexico halfway before then saying, "No, no, no, I didn't say that,” on Wednesday in a Bloomberg interview when presented with his prior comments.

Market whiplash on tariffs this week shows the limits of listening to anyone but Trump

In the end, Trump offered a plan that few saw coming as he backtracked perhaps more than halfway with a one-month delay on tariffs on products that are traded under the rules of the US-Mexico-Canada Agreement.

It’s a move that could see over 80% of goods exempted from duties for the time being.

Along the way, stocks yo-yoed on the uncertainty with the Nasdaq even entering into a correction in a week that now appears poised to end with tariff levels on Mexico and Canada less changed than expected after Trump’s significant reversal on both countries.

"It's very hard for the market to rally sustainably under these conditions," Ahmed Riesgo, the chief investment officer at Insigneo, said in a Yahoo Finance interview Thursday as the week neared an end, noting the whipsaw from the White House had left markets “exhausted.”

"A lot of investors are simply throwing their hands up and saying, 'I'll come back in when there's more certainty,'" he added.

One country not in for relief this week was China, which saw 10% blanket duties on their goods double to 20%.

Matthew Holmes of the Canadian Chamber of Commerce added in a statement that “constant threats and economic uncertainty have taken their toll. We see it in delayed business investments, shaky consumer confidence, stalled capital flows, and a volatile stock market.”

For his part, Trump says he wasn’t concerned with the market volatility, noting on Thursday "a lot of them are globalist companies that won't be doing as well because we're taking back things that have been taken from us many years ago."

He also called the market turbulence this week "a short-term interruption."

A whipsaw week

The week began with Lutnick saying on Fox News on Sunday that President Trump would impose tariffs but that there could be some wiggle room — calling it a “fluid situation” and suggesting the 25% rate might be negotiable.

He then sent a similar message on CNN Monday and downplayed the chances of any economic disruptions.

But Trump then took a different tack on Tuesday, going ahead without changing the 25% rates and offering in an address to Congress that "there'll be a little disturbance, but we're OK with that."

Lutnick then followed up with another market-friendly message in a Fox Business appearance Tuesday, suggesting relief could be in the offing but promising, “It’s not going to be a pause, none of that pause stuff.”

Yet a pause is precisely what President Trump then announced Wednesday with a one-month exemption on auto tariffs. Then he offered further pauses on Thursday for both Canada and Mexico.

Other Trump aides didn’t offer much more in the way of clarity.

Treasury Secretary Scott Bessent appeared Thursday at the New York Economic Club and tried to downplay inflation fears from tariffs but then raised eyebrows when he acknowledged that "we could get a one-time price adjustment" because of the duties.

At another point in the appearance, Bessent responded positively to the notion that Trump could end up negotiating tariff rates downward overall but also said the revenue from new import duties would likely be "very substantial" and help pay for Trump and Bessent’s multitrillion dollar tax cut plans.

The confusing week was reminiscent of Trump’s first term, where the president's words and actions often diverged with his aides — especially those tasked with offering a calming message to markets.

"The one fixed point for Donald Trump is he loves tariffs," Jason Furman, a former Obama economic adviser now at Harvard University's John F. Kennedy School of Government, told Yahoo Finance .

"The reasons he loves them keep changing, the countries change, the magnitude of them change — but those love of tariffs, that's the one thing that there's no whipsawing on."

Ben Werschkul is Washington correspondent for Yahoo Finance.

Every Friday, Yahoo Finance's Rick Newman and Ben Werschkul bring you a unique look at how U.S. policy and government affects your bottom line on Capitol Gains. Watch or listen to Capitol Gains on Apple Podcasts , Spotify , or wherever you find your favorite podcasts.