Global economies were on edge Monday as they braced for US President Donald Trump’s “Liberation Day,” when he is expected to announce tariffs against multiple countries, potentially triggering worldwide economic instability. Trump, who has used presidential powers more aggressively since taking office in January, will reveal the specific tariffs on Wednesday, and may also target entire industries.
The Republican billionaire argues that these tariffs are necessary to address what he believes are unfair trade imbalances, claiming the US has been “ripped off” by other countries. However, critics warn that his approach could spark a global trade war, with major trading partners like China, Canada, and the European Union likely to retaliate.
White House Press Secretary Karoline Leavitt told reporters that Trump’s goal on Wednesday is to announce “country-based tariffs,” but he remains open to imposing sector-specific tariffs in the future. “Any country that has mistreated the American people should expect a tariff in return on Wednesday,” Leavitt stated.
The uncertainty surrounding Trump’s actions caused market volatility, with the Nasdaq Composite Index dropping by about 0.7 percent in New York on Monday, and major European and Asian indexes closing lower. Tension escalated after Trump mentioned that his tariffs could target “all countries.”
Leavitt emphasized that the president views the stock market as a “snapshot of a moment in time,” suggesting that Trump is focused on benefiting American workers, while Wall Street will eventually adapt.
According to The Wall Street Journal, Trump’s advisers have discussed imposing global tariffs of up to 20 percent on almost all US trading partners. Trump, however, remained unclear on the details, only stating that his tariffs would be “far more generous” than existing ones.
Concerns over a US recession are growing, with Goldman Sachs raising its 12-month recession probability from 20 percent to 35 percent, citing lower growth forecasts, decreased confidence, and indications from the White House that it is willing to endure some economic pain. The bank also revised its inflation forecast for 2025.
In response to the uncertainty, China and Canada have already implemented counter-tariffs, and the EU plans to start its own measures in mid-April. More retaliatory actions could follow after Trump’s Wednesday announcement.
Ryan Sweet of Oxford Economics warned to “expect the unexpected,” suggesting Trump may target some of the biggest offenders in trade imbalances. The key question is whether the tariffs will be a negotiating tactic or part of a more significant shift in policy.
Trump could also introduce sector-specific tariffs, potentially impacting industries such as pharmaceuticals and semiconductors. He has already announced auto tariffs set to take effect Thursday. Economists speculate that the tariffs could focus on the 15 percent of US trade partners with persistent trade imbalances, a group known as the “Dirty 15.”
Countries are scrambling to protect themselves, with India reportedly planning to reduce some duties, and European Central Bank President Christine Lagarde urging Europe to work towards economic independence. British Prime Minister Keir Starmer and US President Trump have also engaged in talks over a potential UK-US trade deal.
German Chancellor Olaf Scholz stated that the EU would respond firmly to Trump’s tariffs, but also signaled openness to negotiations. Legal experts suggest that tariffs could be delayed or reduced as talks continue, as seen in February when the US paused tariffs on Mexican and Canadian imports during negotiations.
“The situation is fluid,” said Greta Peisch, a former official at the US Trade Representative’s office. “There are many different scenarios: delays while talks continue, potential reductions, or tariffs being implemented immediately.”