US President Trump has confessed his love of tariffs and his willingness to use them for a variety of policy goals, including raising revenue, forcing action on fentanyl trafficking, and bringing back manufacturing. Photo: PTI
Why is Trump calling April 2 ‘Liberation Day’? What does he want that day?
Trump is set to announce reciprocal tariffs, which he feels will 'liberate' America, bringing back its 'golden age' and thriving economy
US President Donald Trump has called Wednesday (April 2) “Liberation Day” for America.
"Liberation Day" is a term Trump has coined for the day when he will impose reciprocal tariffs on countries globally, the day that he says will bring back America's "golden age" of wealth, manufacturing, and independence.
What did Trump say?
"If you tax us, we will tax you" is the essence of Trump's Liberation Day.
This day, he plans to introduce tariffs targetting trillions of dollars of trade with his country.
“Liberation Day in America is coming soon. For years, we have been ripped off by virtually every country in the world, both friend and foe. But those days are over,” Trump posted on his social media platform Truth Social.
Trump is of the opinion that his trade war against the rest of the world will transform the American economy by moving manufacturing back to the country and creating more jobs and revenue.
Who are the targets?
US Treasury Secretary Scott Bessent indicated that the tariffs would be imposed on products from 15 per cent of countries that the Trump administration considers the “worst US trading partners”.
These countries account for almost 90 per cent of imports into America.
Also Read: Trump tariff cuts: World waits in fear; India quickly finalises terms for US trade deal
Some big questions will be resolved when Trump announces what are expected to be reciprocal tariffs that involve raising US import duties to be equal to the levies that other countries impose on US goods.
Companies will have a greater sense of how many countries will be affected, and how high the duties will be only after the details are announced.
Will suspense end soon?
Questions will still swirl around trade and tariffs for months to come, economists say. More tariffs are in the pipeline and could target specific industries such as pharmaceuticals, copper and lumber.
And the US may reach deals with other countries that could alter the reciprocal tariffs. There will also be countless details that could take months to resolve to determine precisely which imports will be hit with taxes.
As a result, few analysts expect Wednesday's announcement to bring the certainty that many businesses — and Wall Street investors — crave for.
“April 2 is when this all kicks off, it's not when all of this ends,” said Kelly Ann Shaw, a former senior White House trade adviser during Trump's first term. “At some point this will settle. But because we're at the very beginning of what will fundamentally be a total rethink of the global trading system, there are going to be a lot more questions than answers in the near term.”
Also Read: Xi Jinping stresses on 'Dragon-Elephant tango' ahead of Trump's 'Liberation Day' tariffs
How are businesses reacting?
There's a sense of wait and watch.
Randy Carr, CEO of World Emblem, said he expects the products he makes in Mexico and Canada will face a 25 per cent tariff as soon as Wednesday.
The company has already notified customers that it will raise prices by 8 per cent. World Emblem makes badges, patches, and labels for companies, universities, and law enforcement agencies.
In February, Carr put about $9 million in investment on hold, most of which he planned to spend on artificial intelligence and online commerce. He has started to spend some of that money but is doing so more slowly than he would prefer. “We don't know if we'll need the money for tariffs,” he said. “Who knows what will happen on Wednesday.”
Also Read: India will soon drop its tariffs substantially: Trump ahead of April 2 reciprocal threat
The others?
Emerald Packaging, which makes packaging for produce and whose clients include Walmart and Kroger, is holding back on investment for now, given the uncertainty.
CEO Kevin Kelly said the Union City, California-based company learned a big lesson during the height of the pandemic. It started 2021 with $7 million in cash but depleted its reserves by year-end because of the costs of navigating supply chain snarls.
“We're not spending any money right now," he said. “We're trying to build cash ... because we'll need a cushion."
Already in place are duties on cars, steel, aluminium, and all imports from China. Surveys have found widespread uncertainty among manufacturing firms and even oil company executives, who say that higher costs for steel pipe will cut into their profits.
Intentionally ambiguous?
One reason the cloudy outlook surrounding tariffs is likely to remain for months is that Trump wants to maintain some uncertainty about his next steps as a negotiating strategy, Kelly Ann Shaw said.
“Intentional ambiguity is a key component of his approach to trade talks,” Shaw said. Those negotiations will likely start after reciprocal duties are announced and could take months to resolve.
At the same time, Trump is due to receive a series of reports this week on other countries' trade policies, including tariffs but also the subsidies, currency manipulation, and tax policies that Trump officials say can distort trade. Those reports could prompt further steps.
Does Trump ‘love tariffs’?
Trump's love of tariffs is well known. He has often shown his willingness to use them for a variety of policy goals, including raising revenue, forcing action on fentanyl trafficking, and bringing back manufacturing.
Also Read: Trump’s ‘Liberation Day’ of tariffs is coming; how is India gearing up for it?
The White House has also said it will slap 25 per cent tariffs on any country that imports oil from Venezuela, though that also includes the US.
(With agency inputs)
