Trump’s ‘Liberation Day’ Countdown Begins: Global Markets Brace for Tariff Impact
Trump’s ‘Liberation Day’ Countdown Begins: On Wednesday, US President Donald Trump is expected to unveil a list of broad reciprocal tariffs intended to correct trade imbalances, raising alarm throughout the world as nations brace for possible economic fallout.
At a Rose Garden ceremony with his full Cabinet, he will present his worldwide tariff plan. The event is set to start at 4 p.m. Eastern Time (ET), or 1:30 a.m. Indian Standard Time (IST), on April 3, when US markets shut.
Trump announced on Sunday that “all countries” would be targeted. Trump denied rumors that he might lower some tariffs or limit their application to countries with greater trade imbalances, telling reporters, “You would start with all countries, so let’s see what happens.”
Trump claimed that the tariffs will free the US from its reliance on imports, referring to April 2 as “Liberation Day.” Karoline Leavitt, the press secretary for the White House, claimed on Tuesday that India taxes American agricultural products at a rate of 100 percent. “If you look at the unfair trade practices, we have a nearly 300 percent tariff from Canada on American butter and cheese, a 700 percent tariff from Japan on American rice, a 50 percent tariff from the European Union on American dairy, and a 100 percent tariff from India on American agricultural products.”
What are Reciprocal tariffs?
A reciprocal tariff is a levy or trade restriction imposed by one nation on another in retaliation for comparable acts by that nation. The goal of reciprocal tariffs is to balance international trade. The impacted nation may respond to a tariff increase on goods from another by enacting its own levies on imports from the first nation. The goal of this response is to correct trade imbalances, maintain jobs, and safeguard local companies.
Trade barriers may rise back and forth as a result of reciprocal tariffs, thereby sparking a trade war that hurts both economies. These circumstances have the potential to hinder economic growth, boost consumer prices, and upset supply systems.
How Global to react?
A day before the announcement, Trump said, “India would be reducing its tariffs very substantially.” He added, “I believe many countries will lower their tariffs, as they have imposed unfair duties on the United States for years. For instance, the European Union has already reduced its car tariff to 2.5 per cent, which was announced a few days ago—a very small tariff. The US has been charging very little in comparison. I recently heard that India will also be making a significant cut to its tariffs. I asked, why was this not done long ago? Many countries are now planning to lower their tariffs.”
Global leaders have voiced concerns about the potential economic disruption these tariffs could cause. Canadian businesses remain uncertain about the details but expect adverse effects, particularly given the significant trade relationship between Canada and the US. Likewise, markets in India and South Korea are on high alert, with key industries such as pharmaceuticals, copper, automotive, and steel preparing for potential setbacks.
According to a PTI report, the US was India’s largest trading partner between FY 2021–22 and 2023–24, accounting for nearly 18% of India’s total merchandise exports, 6.22% of imports, and 10.73% of overall bilateral trade.
In the upcoming weeks, sector-specific talks between the US and India would be held to finalize the proposed bilateral trade agreement’s framework. According to Commerce Minister Piyush Goyal, the negotiations are moving forward and will protect India’s interests while advancing both nations’ objectives.
The world community is on high alert as the imposition of these levies draws near. Depending on the details of the tariffs and the reactions of the impacted countries, the full effects on global trade, economies, and consumers will become apparent in the upcoming months.
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