As the U.S. marks what President Donald Trump has dubbed “Liberation Day,” the economic landscape is anything but celebratory. His latest round of trade tariffs, aimed at reducing reliance on foreign goods, has sparked concerns of rising costs, supply chain disruptions, and potential retaliation from key trading partners.
While Trump and his supporters hail the move as a step toward economic independence, critics warn it could lead to higher prices for consumers and strain global trade relations. Our Chief Investment Officer, Jeff Brummette, reflects on the recent news, and what implications this may have.
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Yesterday, April 2, 2025, President Donald Trump announced a series of sweeping trade tariffs during a White House event he termed “Liberation Day“.
He presented a 400-page report from the office of the U.S. Trade Representative outlining all the tariff and non-tariff trade barriers that U.S. exporters face. These barriers were combined and translated (we aren’t sure how) into a figure that measures the effective tariff rate U.S. exporters face in that country.
Trump describing himself as a “nice guy” said the U.S. would only counter tariff by half, as seen in the table below.
Reciprocal Tariffs
Source: The White House via X
X (@WhiteHouse)
These measures include a baseline 10% tariff on all imports, with significantly higher rates for specific countries: 34% on Chinese goods, 32% on Taiwanese products, 26% on Indian goods, and 20% on imports from the European Union. Additionally, a 25% tariff was imposed on all automobile imports. Notably, Canada and Mexico were exempted from these new tariffs. Some of the tariffs took effect at midnight and others will come into effect on April 9th.
If fully implemented, these changes would take U.S. tariffs to a historic high, exceeding average import levies of 19.8% seen in 1933, which was not a good period for world trade. The market reaction was swift and negative. U.S. equity futures fell over 3% as Trump spoke. There is nothing positive about this for markets and the likelihood of retaliation from the rest of the world is high.
The theatrical nature of the announcement, complete with a whiteboard presentation in the Rose Garden, underscores the administration’s commitment to this new direction. Trump talked of these measures producing $600 billion a year in revenue which would help reduce the deficit and allow for tax cuts.
It is too soon to gauge what kind of retaliatory responses will occur.
The risk of escalation into a full-blown trade war is high. Such tit-for-tat actions risk disrupting global supply chains, increasing costs for consumers, and dampening economic growth worldwide.
The World Bank has warned that these tariffs could reduce global growth by 0.2% to 0.3%, exacerbating an already sluggish economic outlook. The uncertainty surrounding trade policies may also deter investment, further hindering economic expansion.
To state the obvious this is a very volatile and fluid situation. U.S. businesses and consumers will soon face notably higher prices on many goods. How they respond will determine whether we have an economic slowdown or a full-on recession.
We should expect continued market volatility.
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Hear more from the Oakglen experts
Our investment team continue to provide interesting and informative content to help keep you in the loop on recent global news and market trends. See below for some key highlights from around the world which some of the investment management team have recently covered:
Read more:
- April 2025 Investment Summary
Jeff Brummette, Chief Investment Officer
- The Global Automotive Sector: Losing Grip of the Wheel?
William Lamond, Investment Director
- March 2025 Investment Summary
Jeff Brummette, Chief Investment Officer
You can read other articles from the team on our News & Insights page.
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