Uncertainty Abounds On Eve of ‘Liberation Day’ Tariffs

The uncertainty surrounding President Donald Trump’s trade wars grew thicker Tuesday in advance of his scheduled announcement of “reciprocal” tariffs against U.S. trading partners. 

A day before Trump’s scheduled tariff announcement, which he has dubbed “Liberation Day,” key questions about the planned round of tariffs remained unanswered, including which countries or products would be targeted and how high the new tariffs would be. According to a report in The Washington Post, citing “three people familiar with the matter,” the tariffs could be as high as 20% and applied to nearly all products.

On Monday, Trump repeated comments that the new tariffs would be “reciprocal,” imposed on countries that have their own trade barriers to U.S. exports. They would be lower than the tariffs of the targeted nations, he said, indicating a more tailored approach than a broad 20% tariff.

In recent weeks, financial markets have been whipsawed by successive reports about Trump’s intentions. Markets tanked on speculation that the tariffs would be stiffer and wider-ranging, and they recovered when some reports suggested the import taxes would be on the lenient side and applied more narrowly. The new tariffs would be on top of those already imposed against China, Canada, and Mexico, as well as tariffs on steel and aluminum and a newly announced 25% tariff on imported cars.

“The lack of detail coming from the White House is keeping businesses, investors and foreign governments on edge,” Matt Colyar, an economist at Moody’s Analytics, wrote in a commentary. “Some of this is likely by design. A clock ticking down toward a big reveal hastens negotiations between the Trump administration, industry leaders and foreign governments. Also at play, however, is the magnitude and complexity of the task and the likelihood that no internally consistent plan will be ready on Wednesday.”

Trump has said the tariffs are meant to protect American industry from competition, encourage companies to build factories in the U.S., raise revenue to run the government, and negotiate better trade deals with foreign countries. Some trade experts said the tariffs will likely raise the cost of living for American consumers and risk pushing the economy into a recession.

Meanwhile, the uncertainty surrounding the tariff plans has caused problems of its own, highlighted by a pair of economic reports Tuesday. Employers cut back slightly on job openings in February, the Bureau of Labor Statistics said, as businesses awaited clarity on trade policy. Manufacturing activity slowed down in March, a survey by the Institute for Supply Management showed, while an index measuring prices paid by manufacturers rose to its highest since June 2022 due largely to Trump’s tariffs on steel and aluminum.