Are Trump’s Tariff Threats Toothless?
President Donald Trump’s long-promised “Liberation Day” may end up looking a lot like a regular Wednesday.
The White House this weekend announced plans to narrow the scope of a bloated roster of tariff actions set to take effect April 2, including “reciprocal” duties on nations across the globe and sector-specific tariffs on goods like pharmaceuticals, automobiles and semiconductors.
A report from Bloomberg, which cited sources close to the administration, indicated that certain countries will now be exempt from new duties—and the targeted tariffs on critical industries are not likely to be announced on April 2 at all. The White House is still planning to debut its reciprocal tariff proposal that day, though the timing and details of the plan are still in flux.
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Trump even indicated on Friday that there could be some leeway for China, saying that he’s reserving room to “talk” about trade issues and hopes to meet with President Xi Jinping soon. “I don’t change. But the word flexibility is an important word,” he told reporters. “Sometimes it’s flexibility. So there’ll be flexibility, but basically it’s reciprocal.”
While specifics are scarce, Treasury Secretary Scott Bessent has said the administration will likely impose reciprocal duties on about 15 percent of the nations that have a trade imbalance with the U.S. Twice-deferred 25-percent duties on goods from Mexico and Canada are also set to take effect on April 2, and the White House has repeatedly touted its intention to move forward with them.
As nebulous as the plan remains, Wall Street counted the White House’s apparently softening stance as a win.
On Monday, U.S. stocks rallied, with the Dow Jones Industrial Average jumping 1.17 percent, or 490 points. Meanwhile, the S&P 500 was up 1.42 percent, for a jump of 80 points, and the Nasdaq Composite grew 1.81 percent, or 318 points.
Should Trump fully implement significant tariffs on Canada, Mexico, the European Union and China, revenue growth and profitability for most corporate sectors across the globe will face increased pressure, according to London-based economic research and credit ratings provider Fitch Ratings.
While chemicals and automotive products from across the globe face the most immediate adverse effects when it comes to export volume to the U.S., increased competition and economic growth, non-food and discretionary retail goods (like apparel and footwear) from Latin America, China and Canada face a high risk of slower economic growth, the group announced Monday.
In anticipation of Trump’s retaliatory duties, countries across the globe have been gearing up to impose tariffs of their own on American-made goods. It’s largely yet to be seen how a pullback from the White House might impact those strategies, but new Canadian Prime Minister Mark Carney has shown he’s not shying away from taking proactive action in defense of the country’s economic interests.
On Sunday, Carney, the Liberal Party leader who replaced former Prime Minister Justin Trudeau nine days ago, announced a snap election amid the simmering trade war with the U.S. An election is necessary in order to build a unified resistance against America’s aggression and to create a strong mandate against U.S. trade policies, he said.
With retaliatory duties worth about $60 billion already in place, Carney said the tariff proceeds will be used to support Canada’s workforce and offer new protections, bolster infrastructure projects including clean energy, and establish “new trade corridors with reliable trading partners.” Should the U.S. move forward with its retaliatory duty plan and levy more tariffs on Canada, Carney has said the country is prepared to move forward with $100 billion in new duties.
“There is so much more to do to secure Canada, to invest in Canada, to build Canada, to unite Canada. That’s why I’m asking for a strong, positive mandate from my fellow Canadians,” he said, calling Trump’s trade actions and threats against Canadian sovereignty “the most significant crisis of our lifetimes.” Carney has asked that Canada’s governor general dissolve parliament and call for an election on April 28.
