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Trump’s “Liberation Day” tariffs on the way

  • President Trump’s self-imposed tariff deadline of April 2 has arrived.
  • After multiple delays and false starts, the Trump administration insists this time is for real.
  • Actual details of the Trump team’s tariff plans remain ambiguous and ever-changing.
  • Tariff announcement slated for 1900 GMT (4 pm EST)

United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs. Additional tariffs may or may not be included, but the specifics depend on how Trump was feeling that particular day.

Markets are overall betting that the Trump administration will be imposing a flat 5-10% tariff across the board on Wednesday. The Trump team has been hard at work since the inauguration, slashing federal jobs across all government departments, and the organization that would have been responsible for implementing a complex tariff structure is drastically understaffed to the point of being non-functional, restricting Donald Trump’s ability to execute his own threats of tariff ramp-ups that have reached other-worldly numbers. 

Tariffs are coming, but which ones?

Possible tariffs on the books for Wednesday include “reciprocal” tariffs, where the US will impose a retaliatory tariff on any country who has barriers to US goods imports that the White House deems “unfair”. A flat 25% copper import tax is also on the cards to bring the metal on par with steel and aluminum tariffs that kicked off a couple of weeks ago. A flat 25% tariff on all automobiles not produced within the US is also possible today, with President Trump openly advising US consumers to “not buy a car”. At the last count, functionally all vehicles sold in the US are at least partially manufactured and fabricated in foreign countries.

President Trump has also threatened additional flat tariffs on pharmaceuticals in general, and microchip imports specifically. US consumers already pay some of the highest prices globally for their medication, and most consumer-grade electronics sold within the US rely heavily on discount microprocessors from countries like Taiwan, South Korea, and Japan.

Tariffs FAQs

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.


 

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