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Investing.com - The risk of possible sectoral tariffs being announced by President Donald Trump next week has been removed following media reports over the weekend, although the scale of potential reciprocal levies remains a "concern," according to analysts at Wolfe Research.
Bolstering sentiment on Monday were reports from Bloomberg News and the Wall Street Journal that Trump could unveil tariffs at an April 2 "Liberation Day" announcement that are more targeted than he has previously threatened.
Crucially, tariffs on the automotive, semiconductor and pharmaceutical sectors, another possible measure floated by Trump, will also likely not be revealed at the event, the reports said.
"Omitting the sectoral tariffs from the April 2 package significantly reduces both its aggregate scale and the maximum rate on targeted sectors, given that all of Trump’s tariffs to date have been designed to stack," the Wolfe Research analysts said in a note to clients.
"If this weekend’s reports are correct, and sectoral tariffs are not in the cards next week, the floor for the April 2 rollout is now a negligible expansion of tariffs that markets will greet with relief."
Still, even if the sectoral levies are gone for now, "they may not be gone for good," the analysts flagged, adding that both reports suggest that they remain on the table. Uncertainty around "this large piece of the tariff puzzle" could extend deeper into 2025, the analysts warned.
Trump has said in prior weeks that he would roll out sprawling tariffs on both friends and foes alike in response to perceived trade imbalances.
But his upcoming announcement -- while a significant expansion of his aggressive approach to international trade -- may exclude some nations or blocs, the reports said, citing aides and allies to the president.
Trump is still planning to announce tariff rates that are due to come into effect immediately, possibly provoking retaliatory countermeasures from some countries, the reports said. Those countries who do not impose tariffs on the U.S. and with whom the U.S. has a trade surplus may be exempted from the reciprocal levies, Bloomberg added.