President Donald Trump has called it “liberation day” — when global commerce will finally start to rebalance and the US will no longer be mistreated by its trading partners.
But much of America is looking at April 2 — when Trump will set high new tariff rates on imports from a wide range of allies and adversaries — with trepidation.
Trump’s sweeping levies will take American protectionism to a level not seen since the second world war. They have been preceded by a sell-off in US equity markets, a drop in consumer confidence, and alarm bells from pollsters over the president’s handling of the economy.
“I think there’s an enormous amount of anxiety,” said Douglas Holtz-Eakin, a former White House official under George W Bush and founder of the American Action Forum, a right-leaning economic think-tank in Washington. He said the White House was running “a real risk of recession” in its attempt to raise tariffs that Peter Navarro, a senior Trump aide, had said could be worth as much as $600bn a year.
“That’s incredibly foolish just from a domestic macro policy perspective. When you start layering in the international, global implications . . . it’s just easy to be very, very nervous about this,” Holtz-Eakin added.
The measures to be announced this week are widely expected to include what the White House has labelled “reciprocal” tariffs on countries to punish them for their own levies on US goods as well as other policies disliked in Washington, including taxes on digital services and consumption.
Canada, Mexico, the EU, China, India and other countries are expected to be in the crosshairs of the US administration’s tariffs.
Separately, Trump has also been targeting specific sectors for additional levies, unveiling his plan last week to hit car imports with 25 per cent tariffs and promising levies on pharmaceuticals as well.
In recent weeks, Trump and his top economic officials have been fielding pleas from foreign diplomats and officials as well as business leaders and lobbyists to tame their plans. However, the White House has continued to keep them all on edge about the details, with no sign of any big concessions.
“The tariffs will be far more generous than those countries were to us, meaning they will be kinder than those countries were to the United States of America over the decades. They ripped us off like no country has ever been ripped off in history and we’re going to be much nicer than they were to us. But it’s substantial money for the country nevertheless,” Trump told reporters on Air Force One returning from Florida to Washington on Sunday.
Speaking of his plan for car tariffs earlier in the weekend in an NBC interview, Trump shrugged off fears that the cost of buying a car in America could rise as a result. “I couldn’t care less if they raise prices, because people are going to start buying American-made cars,” he said.
“Trust in Trump,” Navarro said, speaking to Fox News Sunday.
“The reason why we’re not going to see inflation is because the foreigners are going to eat most of it. They have to. We’re the biggest market in the world.”
But the warning signs for Trump about his trade plans have been piling up.
A CBS News poll released on Sunday has found that 55 per cent of Americans think the president is focusing “too much” on putting tariffs on foreign goods, while 64 per cent think he is not spending enough time on fighting inflation and “lowering prices”.
Overall his approval rating on the economy is 48 per cent, while 52 per cent disapprove, reflecting public scepticism about his performance on a key issue that propelled him to victory in the 2024 election.
Republicans on Capitol Hill have largely fallen in line with Trump’s tariffs, but some in the party are starting to raise objections.
“I don’t think Americans want to pay more for their automobiles. Right now, North America actually co-operates together to be able to build many of America’s cars,” James Lankford, the Oklahoma Republican senator, told CNN on Sunday.
On Friday, the Republican mayors of Rochester Hills, Michigan, and Columbia, South Carolina, joined counterparts from Canada and Mexico and other parts of the US to warn about the impact of the levies.
“The escalation of tariffs only raises costs for businesses, workers, and consumers across North America. Tariffs are taxes that increase the cost of living, drain bank accounts, put supply chains and jobs at risk and disrupt the local businesses that drive the economies in all three nations. Our communities will feel the impact first,” the mayors said.
The danger for Trump and Republicans would be if the president fails to explain the benefits of his protectionist policies to the public, which is still searching for relief from high costs.
“People didn’t ask [Trump officials] for a new global order. They asked them for stable economic performance,” said Holtz-Eakin. “They’re trying to do the former. It’s going to cost them the latter,” he added.
Union leaders including Shawn Fain, president of the United Auto Workers, have welcomed Trump’s tariffs.
“Tariffs are a tool in the toolbox to get these companies to do the right thing . . . and the intent behind it is to bring jobs back here. And, you know, invest in the American workers. The American working class people have been left behind for decades, and they’re sick of it,” he told CBS.
But Trump has increasingly been willing to use his trade bluster for geopolitical goals.
After vowing to raise tariffs on buyers of Venezuelan oil last week, he on Sunday warned countries that purchase Iranian and Russian oil that they would also face “secondary tariffs” — a move that in Moscow’s case was aimed at putting further pressure on President Vladimir Putin to reach a peace deal with Ukraine.
Trump’s bet is that the application of tariffs is now a show of strength internationally and a political winner domestically. But Democrats will pounce if the public starts to balk.
Virginia Democratic senator Mark Warner said on Fox News on Sunday that the stock market was “crashing because they think the tariffs are stupid”. He added that the Smoot-Hawley tariffs of 1930 led to the Great Depression.
“God willing what Trump’s doing is not going to lead to the same place,” said Warner.
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