Trump’s ‘Freedom Day’ Tariffs Poised to Transform International Trade Dynamics

As anticipation builds for President Donald Trump’s upcoming declaration on new tariffs, experts are raising alarms about the potential fallout on trade, inflation, and employment.

Reports suggest that Trump will reveal his tariff plans during a press conference in the White House Rose Garden on April 2, calling it “Liberation Day.” While specifics remain vague, these tariffs are expected to be implemented immediately. Trump has indicated that these measures will affect all nations but is open to individual negotiations. This comes alongside existing 25% tariffs on imports from Canada and Mexico set to kick in on the same day, as well as a similar duty for auto imports starting shortly after. The U.S. already imposes blanket 25% tariffs on steel and aluminum imports and a 10% tariff on goods from China.

A simulation by Moody’s using a hypothetical global tariff of 20% predicts dire consequences: a potential GDP decline of 1.7%, job losses totaling around 5.5 million, an increase in unemployment rates from 4.1% to approximately 7%, and possibly plunging the U.S. into a significant recession. Meanwhile, Aston Buisness School in the UK warns that an all-out trade war could result in global welfare losses amounting to $1.4 trillion while pushing up prices for everyday items by nearly 2.7%.

In preparation for “Liberation Day,” the U.S Trade Representative recently published findings highlighting major trade obstacles faced by American businesses across various countries—especially targeting China for not adhering to previous agreements made during Trump’s first term and allegedly manipulating export controls against U.S supply chains. the report also pointed fingers at Canada’s import restrictions affecting dairy products and poultry from the U.S., EU regulations concerning pesticides and genetically modified crops used domestically, along with mexico’s inconsistent enforcement of border regulations.

In response to any forthcoming tariffs from Washington, both Canada and Mexico have pledged retaliation strategies while European union leaders have expressed readiness as well; Commission President Ursula von der Leyen emphasized this point when addressing EU lawmakers just before April began: “We have robust plans ready,” she stated confidently while asserting that “Europe holds many cards.”

“all options are available,” she cautioned.