“Well we have some very, very good news today,” Trump began his address exclaiming that “This is Liberation Day.”
“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed and the day that we began to make America wealthy again,” Trump says.
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. American steel workers, auto workers, farmers and skilled craftsmen — we have a lot of them here with us today. They really suffered gravely.”
“In a few moments, I will sign a historic Executive Order, reciprocal tariffs on countries throughout the world. Reciprocal. That means they do it to us and we do it to them. Very simple. Can’t get any simpler than that.”
Trump lays out his theory that tariffs will bring back a “golden age” for the US, a phrase he also used in his inaugural address:
“Jobs and factories will come roaring back into our country, and you see it happening already. We will supercharge our domestic industrial base.”
Trump says the reciprocal tariffs will bring “stronger competition and lower prices for consumers” in the US.
Finally, Trump announces his tariff plan details as a “Declaration Of Economic Independence”
Specifically, Trump announced a baseline tariff rate of 10% for all countries (below the 15% consensus and 20% worst case) beginning April 5th.
Trump confirmed the 25% tariff on all auto imports.
BUT, specific reciprocal tariffs for ‘bad actors’ starting on April 9th.
Additionally, Trump said they will not be full reciprocal tariffs, then held a chart up showing the individual nation (trade-weighted average) tariff levels.
Here is the full list:
Here are some specifics:
- China: 34% (which is on top of the current 20% tariff, meaning a total 54% tariff)
- EU: 20%
- Japan: 24%
- UK: 10%
- South Korea: 25%
- Thailand: 36%
- Switzerland: 31%
- Taiwan: 32%
- Malaysia: 24%
Here are the hardest hit nations:
- Iraq 39%
- Mauritius 40%
- Syria 41%
- Falkland Islands 41%
- Vietnam: 46%
- Madagascar 47%
- Laos 48%
- Cambodia 49%
- Lesotho 50%
- Saint Pierre & Miquelon 50%
Mexico and Canada are not on the list as US will continue to exempt USMCA-compliant goods.
For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect, and are unaffected by this order. This means USMCA compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff. In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12% reciprocal tariff.
Some goods will not be subject to the Reciprocal Tariff.
These include:
(1) articles subject to 50 USC 1702(b);
(2) steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs;
(3) copper, pharmaceuticals, semiconductors, and lumber articles;
(4) all articles that may become subject to future Section 232 tariffs;
(5) bullion; and
(6) energy and other certain minerals that are not available in the United States.
Initially markets heard Trump’s comments as ‘better than expected’ and futures spiked on the news, but then as he showed the chart of specific tariffs, futures plunged.
“If you want your tariff rate to be zero, then you build your product right here in America, because there is no tariff if you build your plant, your product in America,” Trump said, concluding:
“Likewise to all of the foreign presidents, prime ministers, kings, queens, ambassadors and everyone else who will soon be calling to ask for exemptions from these tariffs, I say terminate your own tariffs, drop your barriers, don’t manipulate your currencies.”
The White House issued a full Fact Sheet here…
“These tariffs will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated.”
And cue the negotiations…
Adam Hetts, global head of multi-asset at Janus Henderson, suggests this is the opening salvo for negotiations and the question is how much economic pain Trump is willing to tolerate:
“Eye-watering tariffs on a country-by-country basis scream ‘negotiation tactic,’ which will keep markets on edge for the foreseeable future. Fortunately, this means there’s substantial room for lower tariffs from here, albeit with a 10% baseline in place. We’ve seen the administration have a surprisingly high tolerance for market pain, now the big question is how much tolerance it has for true economic pain as negotiations unfold.”
Treasury Secretary Bessent appeared on Bloomberg TV with a simple message to the world: Don’t panic, don’t retaliate
“As long as you don’t retaliate, this is the high end of the number,” he says.
