President Donald Trump’s administration is preparing to impose new tariffs on most imports starting 2 April, a move Trump has dubbed “Liberation Day.” The plan marks a major escalation in his trade policies, with White House officials reportedly drafting measures that could affect “trillions” of dollars in goods.
Since taking office, Trump has already raised tariffs on about $US800 billion ($1.3 trillion) worth of imports from China, Mexico, and Canada. The moves have shaken financial markets, raised fears of a US recession, and prompted retaliation from trading partners. Despite these concerns, Trump’s team is now pushing forward with broader tariff measures, with Vice President J.D. Vance, Commerce Secretary Howard Lutnick, and Treasury Secretary Scott Bessent involved in the planning.
‘Reciprocal tariffs’ strategy
The new plan revolves around what Trump calls “reciprocal tariffs,” a system under which US import duties would match the tariffs imposed by foreign countries on American goods. Trump has argued that other nations impose unfairly high trade barriers on US exports and has pledged to respond with equal tariffs.
“If India, China, or any other country hits us with a 100 or 200 percent tariff on American-made goods, we will hit them with the same exact tariff,” Trump said during his campaign. “An eye for an eye, a tariff for a tariff, same exact amount.”
According to the World Trade Organization, most advanced economies have similar average tariff rates. The US currently has a trade-weighted tariff rate of 2.2 percent, compared with 1.9 percent in Japan and 2.7 percent in the European Union. If implemented, Trump’s reciprocal tariff plan could see US tariffs return to early 1930s levels of around 20 percent, said Edward Gresser, vice president of the Progressive Policy Institute.
Challenges in implementation
The administration is still determining how to implement the new tariff system. The Office of the US Trade Representative is responsible for enforcement, but sources familiar with internal discussions say there are concerns about whether the agency has the resources to precisely match tariffs on individual products across different countries.
Trump does have some existing legal authority to impose tariffs, such as through a 1930 trade law that allows duties of up to 50 percent if a country is deemed to discriminate against US goods. However, broader tariff measures could take months to implement and may require congressional approval.
The administration had initially considered grouping trading partners into three categories—high, medium, and low tariff rates—but has now opted for a more customised approach, setting specific tariffs for each country. Bessent said on Fox Business that factors such as currency manipulation and “labour suppression” would also be considered when determining tariffs.
Market reaction and economic concerns
Trump’s aggressive trade stance has alarmed investors. The S&P 500 has fallen more than 8 percent in the past month, while the Nasdaq has dropped nearly 13 percent. A widely watched consumer confidence index has also declined to its lowest level since 2022, with Americans’ five-year inflation outlook rising to 3.9 percent—the highest since 1993.
Despite these concerns, Trump remains committed to his trade agenda. “April 2 is a liberating day for our country,” he told reporters. “We’re going to be getting back a lot of the wealth that we so foolishly gave up to other countries, including friend and foe.”
While Trump’s administration has hinted that some trading partners might negotiate lower duties to avoid tariffs, many industries are already lobbying for exemptions. Domestic shrimp producers, Christmas tree growers, and jam manufacturers have argued for higher tariffs on imports that undercut US businesses. Meanwhile, foreign trade groups such as Japan’s Keidanren have urged US officials to consider broader economic partnerships rather than imposing blanket duties.
The full details of the tariff plan are expected to be unveiled in the coming weeks, with significant uncertainty over how it will be executed and what economic impact it will have.
