At the last moment, "saving" the US stock market! Trump says reciprocal tariffs will be "flexible," and the three major stock indices turn positive

Recently, the U.S. stock market, which has repeatedly fallen due to tariff risks, surprisingly received "help" from Trump, turning to gains before the close on Friday.

On March 21, local time, media reported that France proposed that if U.S. President Trump unfairly uses tariffs to force the EU to change its policies, the EU should consider using its strongest retaliation measure against the U.S. for the first time—referred to as the "Anti-Coercion Instrument" (ACI). A small number of EU countries, including France, currently believe that the use of ACI should be put on the agenda, even if it is not the preferred course of action.

ACI has been in existence for more than two years. In October 2023, the European Parliament passed the Anti-Coercion Instrument Bill, aimed at deterring third countries from targeting the EU or its member states. As a last resort for countermeasures, the bill allows the EU to take a wide range of retaliatory measures, including increasing tariffs, import and export licenses, restricting service trade, foreign direct investment, or public procurement.

After news emerged of France calling for the EU to use the "killer tool," Trump stated in the White House on Friday afternoon, Eastern Time, that his reciprocal tariff plan would have "flexibility." Although Trump granted a one-month exemption for tariffs on Mexican and Canadian automobiles earlier this month, he reiterated that he had not changed his intention to impose tariffs.

"I will not change. But the word flexibility is very important. Sometimes it is flexible. So there will be flexibility, but basically it is reciprocal."

"Flexibility is because tariffs are reciprocal."

In addition, Trump stated that it would be nice for Europe to lower automobile tariffs. He still believes that the EU's stance is very tough and criticized Europe's non-monetary tariffs.

After Trump's remarks, the three major U.S. stock indices, which had previously fallen more than 1% in early trading, further narrowed their losses and collectively turned to gains by the end of trading, ultimately closing slightly higher. Moreover, due to the rebound on Friday, the S&P and Nasdaq successfully reversed their cumulative decline this week, avoiding the danger of a five-week consecutive decline, which would have been the longest streak in nearly three years.

French officials have not confirmed the media reports regarding the use of ACI. However, after the U.S. imposed steel and aluminum tariffs last week, which immediately prompted the EU to announce countermeasures, senior French officials have publicly stated that preparations for a trade war must be made.

According to CCTV, starting from March 12, last Wednesday, the new U.S. steel and aluminum tariffs took effect, canceling existing exemptions for several trading partners, including EU countries, and raising the aluminum tariff from 10% to 25%, equal to the steel tariff. On the same day, the EU announced its decision to impose counter-tariffs on U.S. goods worth €26 billion, including whiskey.

According to CCTV, last Thursday, Trump stated that if the EU does not lift the tariffs on U.S. whiskey products, the U.S. will soon impose a 200% tariff on alcoholic products from EU countries Following Trump's threat, according to Xinhua News Agency, French Finance Minister Bruno Le Maire stated last Friday that the trade dispute between the US and Europe "will enter an escalation phase." "This is a foolish war, but if we want to negotiate with him, we must be on equal footing, and we will also raise tariffs. The EU has the right to do so. After that, we should negotiate with the US side to ease the situation and reduce tariffs."

According to CCTV, French Prime Minister Élisabeth Borne stated last Sunday that Europe must not only respond to military threats but also prepare for a potential trade war with the United States. Currently, the US and Europe have not reached a solution regarding the imposition of tariffs. A trade war is only a last resort. There is still an opportunity for Europe and the US to resolve this situation through negotiation.

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