Breaking: Trump to Announce Major Tariffs on Liberation Day
Americans are familiar with the fourth of July - or Independence Day. But have you heard of Liberation Day? You may have heard this term thrown around by President Trump in regards to tariffs, but you might not know exactly what it means.
Trump has instilled massive tariffs for multiple countries including Canada, Mexico, China, and the European Union. He did this in an effort to help U.S. manufacturers and protect jobs. In return, prices are expected to go up for consumer goods.
The president isn't messing around when it comes to tariffs, and even said its his favorite word. He argued that these taxes will help encourage Americans to buy more American-made goods, which would help boost the economy. However, he has yet to rule out a possible recession as a result.
Tariffs are also intended to help prevent drugs and migrants from entering the U.S. from China, Mexico, and Canada.
While it seems as though there couldn't be anymore tariffs, in comes Liberation Day.
What is Liberation Day?
For weeks, Trump has promoted April 2 as Liberation Day in America. This day represents when massive tariffs will be announced in order to follow the Trump administration's plan for economic success.
While the plans for Liberation Day have been kept quiet, we know a little more now, and the president plans to make an official announcement on Wednesday at 4pm EST in the first Rose Garden press conference of his second term.
White House press secretary, Karoline Leavitt told reporters on Monday, "Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it. The President will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades. He’s doing this in the best interest of the American worker.”
Without elaborating too much further, Leavitt also added that President Trump could announce reciprocal tariffs, which would match other countries' tariffs to the dollar. She noted extremely high tariffs that certain countries charge for American products, such as a 250% tariff Canada has for American dairy products. Regardless of whether these tariffs are ever charged, the Trump administration still sees these high taxes unfair and plan to charge the same.
“This makes it virtually impossible for American products to be imported into these markets, and it has put a lot of Americans out of business and out of work over the past several decades,” Leavitt said. “So it’s time for reciprocity, and it’s time for a president to take historic change, to do what’s right for the American people, and that’s going to take place on Wednesday.”
What to Expect on Liberation Day
While it's ultimately up to Trump what tariffs will be imposed, his advisors have tried to set expectations about what will be announced on Liberation Day.
Potentially, we could expect reciprocal tariffs, 25% tariffs on Mexico and Canada that has been delayed, and tariffs on pharmeceuticals, lumber, copper, and microchips.
However, the the president and government officials have rescinded on their own tariff plans before. Trump announced last week the tariffs would be "far more generous" than what other countries charge the U.S. Then said on Air Force One on Sunday that he would instill reciprocal taxes initially and negotiate down if necessary. So, we should be expecting anything and everything.
Peter Navarro, Trump's trade advisor, stated on Sunday he expects the U.S. could raise $600 billion a year in tariff revenue - which is the largest tax increase since World War II.
However, many economists are concerned that this could actually hurt the economy. With prices expected to rise, many Americans could avoid buying certain products altogether. As seen in recent months where tariff threats have showed a decline in consumer purchasing.
Analysts at Goldman Sachs and JPMorgan have warned the odds of a recession are getting higher.
President Trump's Final Decision
As of late Tuesday, Trump and his team were still weighing ideas for what will be decided on Liberation Day, and no final decision had been made.
There were a few ideas under consideration according to people in the know:
A flat 20% tax on all imports, considered the most extreme option. It would generate billions of dollars in revenue to help offset planned tax cuts.
Different flat rates assigned to groups of countries. Higher rates for countries with poor trade practices and lower rates for others.
Custom rates for each country based on their own import duties. This approach is complex and requires significant effort from U.S. trade officials.
The administration was still studying other options as well. Either way, it has been stated that tariffs will go into effect immediately, but the president is willing to negotiate after.
Stocks Decline on Wednesday
U.S. stock futures took a hit Wednesday morning as Wall Street braced for Trump’s Liberation Day announcement. Dow futures dropped 311 points (0.74%), while S&P 500 and Nasdaq 100 futures fell 0.95% and 1.15%, respectively. This comes after a rollercoaster start to the week, with the S&P 500 swinging between losses and gains over the past two sessions.
Investors are eagerly awaiting clarity on Trump’s new trade measures, which could reshape global trade dynamics. While some hope the announcement will calm market jitters, others worry that uncertainty could linger, especially if the tariffs spark retaliation from other nations.
With stocks already volatile and major indices still down for the year, all eyes are on the Rose Garden this afternoon to see how these tariffs might impact the economy and markets moving forward.