On Tuesday, the White House announced that President Donald Trump is set to impose new tariffs on Wednesday, although specifics about the tariffs’ scale and impact on the global trade landscape remain undisclosed. Trump has referred to April 2 as “Liberation Day,” anticipating significant changes in trade policies, with a Rose Garden announcement planned for 4 p.m. Eastern Time (2000 GMT).
White House spokeswoman Karoline Leavitt indicated that retaliatory tariffs on nations imposing duties on U.S. goods will take effect immediately following Trump’s announcement, while a 25% tariff on auto imports will be implemented on April 3. Treasury Secretary Scott Bessent informed Republican lawmakers that the forthcoming reciprocal tariffs would establish a “cap” on the highest U.S. tariffs that other nations could face, hinting that these tariffs could decrease if countries comply with U.S. demands, as relayed by Republican Representative Kevin Hern from Oklahoma.
Trump has previously imposed tariffs on aluminum and steel imports, as well as increasing duties on all goods from China. Despite this, he has vacillated, postponing or rescinding threats of new tariffs in the past. Nevertheless, Leavitt suggested a firm commitment to proceed this time, emphasizing the expertise of Trump’s advisory team, asserting their long-term focus on revitalizing America’s economic strength.
The administration’s tariff strategies coincide with growing unease in the market; mounting uncertainty appears to be diminishing trust among investors, consumers, and businesses, potentially inhibiting economic activity and driving prices upward. A recent survey from the Federal Reserve Bank of Atlanta indicated that corporate financial leaders expect tariffs to push prices higher this year while hindering hiring and growth.
Details regarding the anticipated announcement remain vague. Reports suggest that aides may propose a plan to increase duties by approximately 20% on products from nearly all countries, rather than targeting specific nations or items. This could potentially generate over $6 trillion in revenue, which might be distributed to Americans as rebates.
In contrast, there are claims from the Wall Street Journal that the U.S. Trade Representative is considering a more limited tariff approach on a select group of countries rather than a broad 20% increase. A White House aide dismissed advance reports as “mere speculation.” The proposed tariffs have escalated tensions with major trading partners, including Canada, where Prime Minister Mark Carney vowed retaliation to protect Canadian producers and workers against disadvantages relative to their U.S. counterparts.
Carney and Mexican President Claudia Sheinbaum held discussions on Tuesday regarding Canada’s initiative to challenge “unjustified trade actions” imposed by the US, according to the prime minister’s office. They underscored the need to prioritize North American competitiveness while also respecting national sovereignty during these challenging times. The Canadian initiative is in response to the “Buy Canadian” movement, which US businesses claim is obstructing their products from entering Canadian markets.
While other countries have considered countermeasures in reaction to US tariffs, efforts to negotiate with the White House to avert these tariffs remained uncertain as of the recent discussions. There is hope, however, that these efforts could persuade President Trump to retract his tariff plans in the upcoming weeks.
Trump has criticized free trade agreements, claiming they have harmed American workers and manufacturers by diminishing barriers to trade and leading to a growing US trade deficit with the world, currently over $1.2 trillion. Economists have warned that his proposed solution—imposing significant tariffs—could ultimately lead to increased prices domestically and internationally, potentially damaging the global economy. For instance, a 20% tariff could cost US households an additional $3,400, as reported by the Yale University Budget Lab.
Recent indicators suggest that the US economy is slowing down, attributed at least in part to the unpredictability of Trump’s economic policies. Various business and household surveys reflect declining confidence in the economic climate, with fears that the tariffs could incite a resurgence of inflation. The stock market has reacted negatively, with investors shedding stocks for over a month, resulting in a loss of nearly $5 trillion in the US stock value since mid-February. On Tuesday, Wall Street exhibited mixed results as investors awaited further announcements from Trump.
The impacts of these economic tensions extend beyond the US, as factories worldwide, including those in Japan and Britain, reported reduced activity in March as businesses prepared for the impending tariffs. This anticipation has caused some manufacturers to accelerate production to deliver goods before the tariffs take effect. Following two months of growth, US manufacturing activity declined, with reports indicating the highest input costs faced by producers in nearly three years. Tariffs have emerged as a primary concern for factory managers, indicating that rising prices amidst slowing business activity could signal an approaching stagflation, as noted by Jeffrey Roach, chief economist at LPL Financial.
