US President Donald Trump confirmed on Monday that he will introduce new tariffs this week. However, he assured that he will be “very kind” to trade partners. His decision, aimed at addressing trade imbalances, could disrupt global markets.
Trump, who has aggressively used presidential powers on trade, hinted that he might announce the “reciprocal tariffs” as early as Tuesday night. He believes the US has suffered due to unfair trade deals, stating, “We’ve been ripped off by every country in the world.” Calling the upcoming move a “Liberation Day” for the US, he justified the need for these tariffs.
More Industry-Specific Tariffs Possible
Trump also suggested that certain industries might face additional tariffs. When reporters pressed for details, he responded, “You’re going to see in two days, which is maybe tomorrow night or probably Wednesday.” Nevertheless, he reassured, “We’re going to be very nice, relatively speaking, we’re going to be very kind.”
Despite his assurances, critics argue that these tariffs could spark a global trade war. Major economies like China, Canada, and the European Union may retaliate, creating economic instability. In response to Trump’s expected announcement, China, South Korea, and Japan have already agreed to strengthen their trade relationships.
TikTok Deal May Link to China Tariffs
Trump dismissed concerns that his trade policies would push allies closer to China. Additionally, he suggested that a potential TikTok deal could tie into the new tariffs on China. Meanwhile, White House Press Secretary Karoline Leavitt confirmed that Trump will announce “country-based tariffs” on Wednesday. However, sector-specific tariffs remain under consideration.
Markets React to Uncertainty
Trump’s tariff plans have already impacted financial markets. While major European and Asian stock indexes closed lower, the Dow and S&P 500 managed to gain slightly. Investors remain cautious, especially after Trump declared that his new tariffs would affect “all countries.”
According to The Wall Street Journal, Trump’s advisers have discussed imposing global tariffs of up to 20%, targeting nearly all US trade partners. However, Trump has kept the details vague, only saying that his new tariffs will be “far more generous” than those imposed on American goods.
Economic Concerns and Recession Fears Grow
Trump’s tariff strategy has fueled recession concerns in the US. As a result, Goldman Sachs raised the probability of a recession within the next 12 months from 20% to 35%. Analysts cited slowing growth, declining consumer confidence, and White House statements indicating that the administration is prepared for “economic pain.”
Several nations have already responded. China, Canada, and the EU have announced counter-tariffs, with the EU planning to implement new measures by mid-April. More retaliatory steps could follow after Trump’s announcement.
International Monetary Fund (IMF) Chief Kristalina Georgieva acknowledged that Trump’s tariffs have caused global anxiety. However, she downplayed fears of a dramatic economic downturn.
Targeting Countries with Trade Imbalances
Experts predict that Trump will focus his tariffs on countries with significant trade imbalances with the US. Treasury Secretary Scott Bessent has labeled this group the “Dirty 15.” It includes China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada, and India.
Besides country-specific tariffs, Trump may introduce new levies on industries like pharmaceuticals and semiconductors. Additionally, he has already scheduled auto tariffs to take effect on Thursday.
Global Leaders Seek to Minimize Impact
Nations worldwide are working to reduce their exposure to Trump’s tariffs. Reports suggest that India may lower some of its duties to avoid further penalties.
Meanwhile, European Central Bank President Christine Lagarde urged Europe to pursue economic independence. Speaking to France Inter radio, she described the situation as an “existential moment.”
In addition, British Prime Minister Keir Starmer and German Chancellor Olaf Scholz have engaged in discussions with Trump. While both leaders remain open to negotiations, the EU has warned that it will respond firmly if necessary.
Could Tariffs Be Suspended?
Some experts believe that Trump could reduce or pause the new tariffs if needed. Greta Peisch, a partner at law firm Wiley Rein, stated, “It is entirely possible” for fresh tariffs to be adjusted quickly.
Notably, Washington had previously halted steep tariffs on Mexican and Canadian imports in February, giving both nations time to negotiate. It remains uncertain whether Trump will adopt a similar strategy this time.