Dubbed by Trump as “Liberation Day,” the rollout of these duties follows previous hikes on a range of goods from autos to steel and aluminum, and is likely to draw further backlash from allies and businesses already reeling from rising costs and uncertainty.
Administration officials have described these levies as necessary to correct a persistent U.S. trade deficit, which Trump claims stands at $1.2 trillion. Treasury Secretary Scott Bessent has told lawmakers the tariffs would be subject to negotiation on a country-by-country basis, though the White House has not offered precise details.
Some insiders anticipate a 20% flat duty; others suggest narrower, country-specific rates. According to the Yale University Budget Lab, a universal 20% tariff could cost the average American household at least $3,400 annually.
The new measures take effect immediately after Trump’s Wednesday announcement in the White House Rose Garden, with a separate 25% global auto tariff going live on April 3. Past additions to the tariff arsenal include a 25% tax on steel and aluminum, heightened duties related to fentanyl, and extended levies on goods from Canada, Mexico, China, and other nations.
Economists and allies alarmed
European Central Bank President Christine Lagarde warned the plan is “negative the world over,” predicting cost hikes and potential retaliation. Stocks have tumbled, shedding trillions in U.S. equity value since mid-February as consumer and investor confidence wanes. U.S. business leaders, grappling with repeated and unpredictable tariff changes, say the volatility complicates supply chain planning.
Amid shortfalls in detail, White House officials nonetheless project bullish outcomes. Trump trade adviser Peter Navarro estimates the tariffs could raise $600 billion yearly — the biggest post-World War II tax increase. Still, critics, including former Council of Economic Advisers member Heather Boushey, note that similar measures from Trump’s first term never produced the promised manufacturing “boom.”
Potential effects on various sectors
– Automotive: A Mexican-built car that previously faced a 2.5% duty could be subject to stacked tariffs, including fentanyl-related and proposed auto duties, surpassing 50%.
– Consumer goods: From clothing to household staples, importers may shift the higher tax burden onto shoppers, further pressuring household budgets.
– Allies retaliate: The European Union, Canada, Mexico, and Australia have threatened or enacted reciprocal tariffs, fueling concerns of a global trade war.
Global allies push back
Some allies remain in talks with Washington but prepare reprisals if the U.S. does not roll back punitive measures. Canada is already fighting steel and aluminum tariffs plus new duties aimed at fentanyl-linked countries. The EU placed duties on about $28 billion worth of U.S. goods, prompting Trump to threaten a 200% tariff on European alcohol. Australian leaders similarly vowed to protect domestic industries if they face the burden of newly announced tariffs.
“America First” or world at risk?
Trump insists tariffs will protect American workers, reduce the deficit, and spark job-creating factory expansions. But critics say the uncertain and rapidly shifting environment stands to undercut world trade, hamper growth, and sever alliances. Opponents also argue that stacking tariffs is effectively a backdoor tax on U.S. consumers, risking a recession.
“April 2, 2025, will go down as one of the most important days in modern American history,” White House press secretary Karoline Leavitt said, touting the administration’s confidence that the measures will usher in a “manufacturing superpower era.”
Nonetheless, many industries remain on edge, awaiting clarity on the final form and scale of Trump’s sweeping tariff plan.
(jh)
Source: Associated Press, Reuters, IAR