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Yesterday, President Trump held his promised announcement (as he had said during his joint address to Congress) of tariffs. The big presser happened in the Rose Garden, complete with charts and union workers present.
The atmosphere in the Rose Garden was full of cheers and applause, especially from those union workers. The entire Trump cabinet was present, as well as Vice President Vance. President Trump wanted this announcement to be A Very Big Deal.
Jennifer Oliver O’Connell from RedState highlighted this portion of the speech:
In the coming days, there will be complaints from the globalists, and the outsourcers, and special interests, and the Fake News, always the Fake News will always complain. But, never forget, every prediction our opponents made about trade for the last 30 years has been proven totally wrong. They were wrong about NAFTA, they were wrong about China, they were wrong about the Trans Pacific Partnership, which would have been a disaster if I didn’t terminate it. If I didn’t terminate that, United Autoworkers, you would have had no jobs in this country. You would have had no jobs. It was all going to other countries. In my first term, they said tariffs would crash the economy. Instead, we built the greatest economy in the history of the world. And again, I have great respect for President Xi of China, great respect for China, but they were taking tremendous advantage of us. And, I commend them for that. I say, hey, if you can get away with it, that’s okay. But, you know, they understand exactly what’s happening and they probably, most of them are saying it’s about time they did something. But they’re going to fight, they’re going fight, everyone going’s to fight. I say to the leaders, look you gotta take care of your country, but we have to start taking care of our country now. We can’t do what we’ve been doing for the last 50 years…
The Office of the United States Trade Representative have published their calculations for these reciprocal tariffs, attempting to demonstrate a mathematical basis for how these rates were set. These calculations produced several eyebrow raising results.
All U.S. imports will be subject to a 10% tariff, effective April 5. Some nations, however, will be hit with higher tariff rates that start April 9. For example, a 34% duty will apply to China, 20% for Europe and 24% for Japan.
Trump called the latter a “discounted reciprocal tariff,” explaining that the U.S. will be charging half the tariff rate that many nations impose on U.S. products.
The White House posted more country-specific tariff rates on one of its X accounts.
A new 34% tariff on China will add to previous duties, such as the 20% tariff Trump imposed over fentanyl. The base tariff rate on Chinese imports will be 54%, before adding tariffs imposed during Joe Biden’s presidency or Trump’s first term.
Trump had flagged over the weekend that he might target almost all of America’s trading partners, but the combination of a universal tariff plus country-specific tariffs was a surprise.
Also in his speech Wednesday, Trump confirmed that a 25% tariff on foreign-made automobiles would go into effect on Thursday, April 3.
The list of tariff rates can be seen here in the X thread from Trump’s Rapid Response 47 account.
The real question is, what happens now? The most honest answer is “I don’t know,” which economist Mohamed El-Erian said in his own X post.
“I don’t know.” This has been my response to repeated questions about what will emerge from this afternoon’s US tariff announcements. Yet, I continue to be asked, so here we go:
IF the announcement’s aim is to meet the multiple objectives that the Administration has set out for…— Mohamed A. El-Erian (@elerianm) April 2, 2025
“I don’t know.” This has been my response to repeated questions about what will emerge from this afternoon’s US tariff announcements. Yet, I continue to be asked, so here we go:
IF the announcement’s aim is to meet the multiple objectives that the Administration has set out for tariff policy (reciprocity, revenue, onshoring industry, specific non-economic objectives, etc.), we should expect a general across-the-board (universal) tariff combined with an overlay of individual sector and country surcharges that would be subject to multiple rounds of negotiations.
The Administration would thus aim to meet multiple objectives with a hybrid approach to tariff policy. The risk is a “spaghetti bowl” outcome where implementation and internal consistency prove challenging.
Democrats are very clearly thinking that the reciprocal tariffs will fail, and thus saddle President Trump with a tanking economy. Republicans are afraid that the reciprocal tariffs will fail, and thus saddle President Trump with a tanking economy. Some countries are either slashing or dropping their tariffs entirely.
The tariffs have few cheerleaders outside of the administration, so what have the Cabinet members said? Commerce Secretary Howard Lutnick is a true tariff believer, and is pitching a “renaissance” in the economy. Treasury Secretary Scott Bessent had a very simple message.
Treasury Secretary Scott Bessent offered a three-word reply on Wednesday to countries looking to respond to the United States’ broad tariffs: “Do not retaliate.”
“My advice to every country right now is do not retaliate. Sit back, take it in, let’s see how it goes. Because if you retaliate, there will be escalation,” Bessent said Wednesday in an interview on “Special Report” shortly after the announcement. “If you don’t retaliate, this is the high-water mark.”
Bessent repeated this on CNN as well.
https://twitter.com/yashar/status/1907625441076404510
Well, we don’t know what countries plan on doing yet, but the markets are definitely reacting.
At 6.30pm in after-hours trading in New York, futures that track the S&P 500 were down 2.3 percent, while one that is tied to the Nasdaq-100 fund dropped 4.2 percent. A fund that follows the Dow Jones slipped 2.3 percent.
Stocks of major importers took a hit late Wednesday. Nike plunged 6 percent, and General Motors fell 3 percent. Companies already struggling amid tariff concerns, like Nvidia and Tesla, each lost about 3 percent. Five Below dropped 11 percent, while Gap tumbled 12 percent.
Although Wall Street’s main trading sessions ends at 4pm in New York, traders can continue buying and selling regular stocks until 8pm in after-hours trading.
Beyond that, investors can trade futures contracts around the clock, except for a one-hour break starting at 5pm each day. Futures track the prices of major indexes like the S&P 500, Nasdaq, and Dow Jones, as well as gold and other commodities.
The Asian and European markets are bracing for impact as well. But after the initial shock of the announcement plays out in the markets, what happens then? Is there a stabilization because now the markets know what to expect? Will some tariffs be pulled back because some countries decide to reduce their own? The markets are waiting to see if Trump is using tariffs for leverage, or if he’s just using tariffs because he likes them personally. Today is going to be a roller coaster of a day in stocks. The best advice is to not look at your 401(k)s for about a week, or until the shock wears off. But just how long are the American people willing to tolerate a volatile market, especially if they perceive a negative impact on their own savings?
The last question that we don’t yet have an answer to is, if this all fails and the economy begins to truly falter, will President Trump be willing to reverse course and tinker around to blunt the effects on the economy? Will he find a way to save face and roll some of the tariffs back, or has he bought in so hard to the tariffs that he won’t back down, even in the face of bad economic news? Like El-Erian said, the answer to that is “I don’t know.” We can hope that President Trump will be flexible enough to change things as they go, because he certainly wants to win and wants to have a strong economy. Only time will tell if reciprocal tariffs end up being the net positive that the Trump administration thinks they will be.
Featured image via geralt on Pixabay, cropped, Pixabay license
John Shepherd says: Tariffs are a negotiation tool
Or
Tariffs will raise revenue and lead to a manufacturing renaissance.
Choose one, tariffs can’t be both.
Tariffs may indeed bring back mass manufacturing but they won’t bring back many jobs because a lot of mass manufacturing is done by robots, and tariffs won’t raise much revenue if we stop importing stuff.
Liz says: “Tariffs are a negotiation tool
Or
Tariffs will raise revenue and lead to a manufacturing renaissance.
Choose one, tariffs can’t be both.”
Of course they can do both. Why can’t they?
Your response is nonsensical.
The tariffs are largely about making America’s trading partners compete with each other to give America the best deal. They are also about bringing manufacturing back (which is a security interest as well…because when you rely on an enemy country for critical items that can be shut off…that is a security risk, and we’ve done that for far too long).
Liz says: Just to add: Furthermore, look at what happens within the CONUS.
Have policies in Texas and Florida increased revenue while offering a good deal to businesses in tax cuts as an incentive to relocate? Yes and yes. A twofer.
John Shepherd says: They can’t be both at the same time. If you want to use tariffs as a tool to improve us international competitiveness then you can increase exports. It does nothing to return production to the US. If you want to protect Ametican industry and domestic production there is nothing to negotiate. You just set tariff high enough to eliminate the foreign competitor’s cost advantage.
Do you understand now why it’s either or. Probably not.
Scott says: Because different countries can’t react differently, hence different results, and being both at the same time?
Really, try to be better, you’re just beclowing yourself. Your statements assume that all other countries will react in the same way, which is obviously ridiculous.. Do you understand why you’re flat wrong now? No, probably not.
Liz says: Different countries, and different products.
But I’m guessing based on his avuncular condescension, attempting to reason with Mr “either/or” is a waste of time.
A reader says: He literally put tariffs on places that either a) have no people or b) have very few people and likely don’t do much business with us anywhere. Not just countries, but islands that are territories. There is no logic to the tariffs no matter how much sense you try make of it. Because it’s moronic and nonsensical. It’s all bad business from a businessman who bankrupted a casino as well as several other businesses. I mean, he put tariffs on islands where the only inhabitants are penguins, polar bears, some seals and other birds. It’s completely idiotic. And you voted for it. You voted for the idiot who put tariffs on penguins. You voted for this, own it and wear it with pride!
Let me hold your hand while I tell you this: it’s not going to work. We live in a global economy that is too interconnected. Yesterday, an American automaker already announced layoffs due to tariffs. There are things we can’t make here and factories can’t be built overnight. This will have a disastrous effect on the economy, no question. The last time such sweeping tariffs were put in place we went into the Great Depression. I know the writers here are all nostalgic. For that time period but do you really want to live through that? Really?!
And all this for what? His ego? It’s clear both he and this author have zero idea what tariffs are and how they will affect the average consumer. This means less money in your pocket, FYI.
Again he put tariffs on islands without people. He put tariffs on penguins and polar bears. Honestly I think the only response is this: flippers ( and claws) up!
Liz says: If there is no logic to tariffs, why have other countries been using tariffs against us (often hidden and called something else like VAT, subsidized industry and so forth).
Liz says: “he put tariffs on islands without people”
What are these Islands devoid of people making and exporting that we can place a tariff on their imports?
Scott says: Do you know a sure-fire way to tell that a leftist is full of shit (besides the fact that they’re a leftist of course)? The use the word “literally”… It’s proof-positive that they’re about the start spewing bullshit.. You prove this maxim on a regular basis.
Liz says: For folks who are interested, this is an interview that kind of summarizes the purpose of the tariffs.
I do not think Trump has explained this well. Bob Lighthizer does a good job here, IMO.
https://www.youtube.com/watch?v=p0IUh8kNSqY
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