Unpacking Trump’s “Liberation Day” tariffs
Image: The White House
President Trump unveiled a series of wide-ranging tariffs yesterday that analysts say represent the biggest overhaul to US trade policy since the post-World War II era.
Let’s break it down: The US will impose 10% tariffs on all imports across the board, with even higher rates—described as “discounted reciprocal tariffs”—for certain nations the White House considers “bad actors” on trade. The White House believes the duties will boost domestic manufacturing.
- China faces a new 34% tariff, while duties on Vietnam (46%), Taiwan (32%), India (26%), South Korea (25%), Japan (24%), the EU (20%), and a dozen-plus other nations are also elevated above the universal 10% rate.
- The new tariffs won’t apply to some countries and goods already hit by separate Trump tariffs in recent weeks. This includes Canada and Mexico, along with imports of steel, aluminum, automobiles, and auto parts.
The impact
The new tariffs mean companies will have to pay at least 10% more for all items they import to the US—from everyday products like cereal and fuel, to more expensive goods like computers—with at least some of the costs expected to be passed on to US consumers. Since the duties vary by country, some items will be impacted more than others.
- The EU, Canada, and China are among several countries that have threatened to enact reciprocal tariffs on US products in response, though many nations have cautioned against doing so due to risks associated with a trade war.
Given these risks…There’s a path for the US to score favorable deals, according to a recent tariff board game simulation organized by the Center for a New American Security.
Markets react: US stock futures fell sharply in the wake of Trump’s tariff announcement, with all three major indexes losing at least 2.5% in after-hours trading. Companies with extensive international supply chains were among the most affected by the after-hours dip, including Apple (-7%), Amazon (-5%), Nike (-7%), and Walmart (-6%).
Looking ahead…Trump’s universal 10% tariff will take effect on April 5, while the higher, country-specific reciprocal tariffs are slated for April 9.
📊 Flash poll: Do you agree with the Trump’s decision to impose wide-ranging “Liberation Day” tariffs?
See a 360° view of what pundits are saying →
Sprinkles from the Left
- Some commentators argue that “Liberation Day” is bad news for the overwhelming majority of Americans, because consumers are, as always, the ones who pay U.S. tariffs in the form of higher prices for goods and services.
- Others contend that Trump’s higher broad-based tariffs mean more pain for America’s working families due to higher prices, while wealthier Americans will reap the benefits of the plan in the form of lower tax rates.
- “Trump’s tariff strategy is worse than a gamble. It’s a surefire loser” –Veronique de Rugy, LA Times
- “Guess who’s in store for pain — and gain — under Trump’s economic plans” –Lael Brainard, Washington Post
- “Donald Trump’s tariffs: a spectacle of struggle and control” –The Guardian Editorial Board
Sprinkles from the Right
- Some commentators argue that Trump’s new round of “reciprocal” tariffs carry a wide range of consequences he isn’t advertising, like new economic risks and uncertainty, harm to US exports, a bigger Washington swamp, the end of US economic leadership, and a major opportunity for China.
- Others contend that despite some short-term pain stemming from the new tariffs, Trump’s art-of-the-deal making skills could end up changing the protectionist behavior of our trade partners down the road.
- “Trump’s New Protectionist Age” –Wall Street Journal Editorial Board
- “Trump tariffs could stoke massive short term pain for better trade deals” –Charles Gasparino, NY Post
- “Does Trump have a Plan B if his tariffs plunge us into recession?” –David Harsanyi, Washington Examiner
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