WASHINGTON/DUBLIN, April 2 (Reuters) – President Donald Trump was set to impose sweeping new tariffs on Wednesday as he proclaimed “Liberation Day” in the United States, escalating a trade war with global partners, risking cost increases and upending a decades-old trade order.
Trump has kept the world guessing on the details of the tariff plans, which were still being formulated ahead of a White House Rose Garden announcement ceremony scheduled for 4 p.m. Eastern Time (2000 GMT).
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The new duties are due to take effect immediately after Trump announces them, while a separate 25% global tariff on auto imports will take effect on April 3. They are also expected to spark retaliatory action from global trading partners.
“IT’S LIBERATION DAY IN AMERICA!” Trump wrote on his social media platform on Wednesday morning, but gave nothing further away.
Trump, who once called the word tariff the “most beautiful word in the dictionary”, has said his reciprocal plans are a move to equalise generally lower U.S. rates with those charged by other countries and counteract their non-tariff barriers that he says disadvantage U.S. exports.
But the format of the duties was unclear with reports that Trump was considering a 20% universal tariff.
Trump’s planned levies will be negative for all, European Central Bank President Christine Lagarde said.
“It will be negative the world over and the density and the durability of the impact will vary depending on the scope, on the products targeted, on how long it lasts, on whether or not there are negotiations,” she said in an interview on Ireland’s Newstalk radio.
As a nervous world awaited details of the tariff plans, stocks retreated on Wednesday, while safe-haven gold held near record highs.
“I can’t recall a situation where the stakes were this high and yet the outcome was so unpredictable,” said Steve Sosnick, chief strategist at Interactive Brokers. “The devil is going to be in the details and nobody knows the details.”
Across sectors, from cars to ocean freight shipping, luxury goods and beyond, business leaders waited to see what would hit them, all the more so as Trump has invoked emergency powers to swiftly add, and occasionally retract and reinstate tariffs.
“You cannot make important decisions on your supply chain when the rules of the game keep changing,” said Peter Sand, chief analyst at freight pricing platform Xeneta.
Italian Prime Minister Giorgia Meloni, who has been careful to avoid criticising Trump in a delicate diplomatic balancing act, warned tariffs would hit Italian companies hard and also be “unfair” on American consumers.
“This is the reason why I remain convinced that we must work to avert a trade war that would benefit neither the United States nor Europe in any way,” she said.
Item 1 of 2 A car carrier transporting vehicles made by South Korea’s automaker Kia Motors which is a sister company of South Korea’s biggest automaker company Hyundai Motors travels near Pyeongtaek port in Pyeongtaek, South Korea, April 2, 2025. REUTERS/Kim Hong-Ji
[1/2]A car carrier transporting vehicles made by South Korea’s automaker Kia Motors which is a sister company of South Korea’s biggest automaker company Hyundai Motors travels near Pyeongtaek port in Pyeongtaek, South Korea, April 2, 2025. REUTERS/Kim Hong-Ji Purchase Licensing Rights
France expected a “pretty powerful” hit that could see tariffs in the range of 20-25%.
A bar chart showing US trade deficits and surpluses
STACKING TARIFFS
In just over 10 weeks since taking office, Trump has imposed new 20% duties on all imports from China over fentanyl and fully restored 25% duties on steel and aluminum, extending these to nearly $150 billion worth of downstream products. A month-long reprieve for most Canadian and Mexican goods from his 25% fentanyl-related tariffs is due to expire on Wednesday.
Administration officials have said that all of Trump’s tariffs, including prior rates, are stacking, so a Mexican-built car previously charged 2.5% to enter the U.S. would be subject to both the fentanyl tariffs and the autos sectoral tariffs, for a 52.5% tariff rate — plus any reciprocal tariff Trump may impose on Mexican goods.
Simple average and trade-weighted tariff rates by country
Growing uncertainty over the duties is eroding investor, consumer and business confidence.
Rattled investors have sold stocks for more than a month, wiping nearly $5 trillion off the value of U.S. equities since mid-February.
The dollar firmed a touch and other currencies held in tight ranges on Wednesday as traders awaited details of Trump’s plans.
RETALIATORY MEASURES
Trading partners from the European Union to Canada and Mexico have vowed to respond with retaliatory tariffs and other countermeasures, even as some have sought to negotiate with the White House.
In Australia, Prime Minister Anthony Albanese and his rival in a May election, Liberal Party leader Peter Dutton, said they would fight back in the face of looming U.S. tariffs that could hit Australian beef.
Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum spoke on Tuesday about Canada’s plan to “fight unjustified trade actions” by the U.S., Carney’s office said.
Trump has argued that American workers and manufacturers have been hurt for decades by free-trade deals that have lowered barriers to global commerce and fueled the growth of a $3 trillion U.S. market for imported goods, leading to a goods trade deficit that exceeds $1.2 trillion.
But a 20% tariff on top of those already imposed would cost the average U.S. household at least $3,400, according to the Yale University Budget Lab.
Additional reporting by Andrea Shalal, Bo Erickson, Nandita Bose, Trevor Hunnicutt, Saqib Iqbal Ahmed, Renee Maltezou, Amanda Cooper, Zoe Law, Angelo Amante, Elizabeth Pineau and Sudip Kar-Gupta; Writing by David Lawder, Ingrid Melander and Matthias Williams; Editing by Stephen Coates and Sharon Singleton
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