By Graham Summers, MBA | Chief Market Strategist
The Trump administration has a “messaging” problem.
Over the weekend, stocks erupted higher when it was announced that the U.S. would provide exemptions from new tariffs for phones, computers and chips from China. This meant that some of the most critical exports from China to the U.S. would only be charged 20% tariffs instead of the much higher tariff rate of 145% that the Trump administration had recently introduced.
Then, on Sunday, Commerce Secretary Howard Lutnick appeared on ABC to state that these exemptions would only be temporary as the Trump administration would soon be introducing “a special focus type of tariff” on those same items in the coming weeks.
Then, later that day, the President himself went on a tirade on Truth Social stating that there would be NO exemptions what-so-ever, and that “no one was getting off the hook
Bear in mind that the action taken by the White House on 4/11/25 LITERALLY stated that there would be “exemptions.”
So, what is it? Are some Chinese exports (chips, computers, phones) exempt from the new 145% tariffs or not? If they are exempt, does that mean that they will still be charged tariffs of 20% as originally introduced, or will there be zero tariffs? And what happens when the “special focus type of tariff” is introduced on these products in the coming weeks?
I have no idea. I don’t think anyone does. And this kind of bungled messaging is leading to a potential disaster for the stock market.
At the end of the day, stocks can digest a lot, but they absolutely HATE uncertainty. And this poor messaging, combined with all the uncertainty about how this will play out has resulted in the stock market triggering a RARE momentum “sell” signal.
The last time this signal went off was right before the bear market of 2022. At that time, stocks lost over 20% in a matter of months.
The lows are likely NOT in. The time to prepare for the next leg down is NOW before it hits.