Investing.com — European luxury goods and auto stocks saw significant gains in trading today, with shares of Stellantis (NYSE: ) up 7.3%, Porsche up 7%, BMW (ETR: ) up 6%, LVMH by 5%, i Kering (EPA:) also gets 5%. The jump in stock prices comes after a Washington Post report revealed that aides to President-elect Donald Trump are considering a more selective approach to tariffs, which could be scaled back from the broad tariffs proposed during his campaign.
The positive market response reflects a shift in Trump’s trade policy, as current discussions propose imposing tariffs only on sectors deemed critical to national or economic security, rather than on all imports. This potential change, which is less drastic than Trump’s original proposal of universal tariffs of up to 20%, is seen as a less disruptive move that could benefit companies in the luxury goods sector and the automotive industry.
The reported tariff plans would focus on key industries the new administration aims to boost in the country, including defense, critical medical supplies and energy production. This targeted approach could mitigate the impact on consumer prices and economic turbulence that a general tariff could cause.
The reassessment of tariff strategies also appears to be influenced by concerns about persistent inflation. Indications from the Federal Reserve of just two interest rate cuts this year suggest that price stability remains a key economic challenge.
As the market reacts to these developments, investors are watching the situation closely, noting that Trump’s policies, while not yet finalized, could significantly change the landscape of global trade. The transition team did not comment on the specifics of internal planning, but the direction of the discussions was enough to positively influence investor sentiment today.
While the automotive and luxury goods sectors are enjoying daily gains, the wider implications of the proposed tariff changes are still unfolding. Market participants will be looking for more clarity on which sectors could face tariffs and how that will intersect with Trump’s other trade policy goals, including his stance on trade with Mexico, Canada and China.
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